DeFi Multiple Flash Loan Attacks Cast a Shadow, More Crises May Lurk Beneath the Surface

On November 7th, worries about a recent DeFi cascading liquidation giving rise to a further liquidity crisis have been spreading within the crypto community. On November 3rd, Stream Finance suddenly announced the suspension of deposits and withdrawals, bringing the storm sweeping through the DeFi world to its peak. One of its external fund managers was liquidated during the intense market volatility on October 11th, resulting in approximately $93 million in losses of fund assets. The entire DeFi ecosystem may be facing a systemic crisis with a Total Value Locked (TVL) of $8 billion, while only around $100 million in losses have been reported so far. The DeFi liquidity protocol Elixir has encountered a risk exposure of $68 million due to this incident. Meanwhile, the Morpho Cofounder responded to a part of the liquidity pool by stating that it has "insufficient liquidity" and emphasized that it is not a systemic vulnerability. Yield stablecoins have experienced the largest single-week outflow since the Luna incident, reaching a total of $1 billion. The market capitalization of the star stablecoin product USDe issued by Ethena Labs has also dropped below $9 billion, experiencing a decrease of about 45% in the past month. To address the liquidity crisis, Compound has temporarily paused several stablecoin borrowing markets on Ethereum. Additionally, the stablecoin USDX under Stables Labs plummeted to $0.314 in the early hours of today. The crisis brought about by asset leverage cascade and opaque management may only be the tip of the iceberg. For more detailed coverage, please refer to "DeFi's Potential $80 Billion Thunder, Only $1 Billion Exploded So Far".