{"id":56818,"date":"2025-11-05T12:46:44","date_gmt":"2025-11-05T12:46:44","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=56818"},"modified":"2025-11-05T12:46:44","modified_gmt":"2025-11-05T12:46:44","slug":"balancer-hack-uncovers-hidden-defi-frauds-as-xusd-depeg-threatens-morpho-and-euler","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=56818","title":{"rendered":"Balancer Hack Uncovers Hidden DeFi Frauds As xUSD Depeg Threatens Morpho And Euler"},"content":{"rendered":"<div>\n<p><span data-preserver-spaces=\"true\">Get your money out of Morpho and Euler! That\u2019s the unfortunate clarion call when Bitcoin, Ethereum, and some of the top cryptos to buy dangerously plunged to crucial support levels.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It is a worrying message that only raises more questions than answers. How come? Morpho and Euler are nothing but blue-chip DeFi protocols cumulatively managing over $1 billion of assets, at least before the Balancer disaster on November 3.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Big money or not, on X, one analyst thinks the liquidity crunch that Balancer-forking dapps, not only on Ethereum but also on the <\/span><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/best-meme-coins\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"><span data-preserver-spaces=\"true\">BNB Smart Chain<\/span><\/a><span data-preserver-spaces=\"true\"> and Ethereum layer-2s, is a cause for concern.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Get your money out of <a href=\"https:\/\/twitter.com\/MorphoLabs?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">@MorphoLabs<\/a> and <a href=\"https:\/\/twitter.com\/eulerfinance?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">@eulerfinance<\/a>! <\/p>\n<p>Here&#8217;s why. <\/p>\n<p>They take your USDC and give it out to insolvent protocols that leverage loop scam stables like xUSD by Stream Defi which just lost $93M of user money.<\/p>\n<p>The incentives are totally misaligned. Curators on Morpho\u2026 <a href=\"https:\/\/t.co\/38fH6Nkczt\" rel=\"nofollow\" target=\"_blank\">pic.twitter.com\/38fH6Nkczt<\/a><\/p>\n<p>\u2014 Duo Nine <img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/26a1.png\" alt=\"\u26a1\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\"> YCC (@DU09BTC) <a href=\"https:\/\/twitter.com\/DU09BTC\/status\/1985695777721549283?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">November 4, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><strong><span data-preserver-spaces=\"true\">DISCOVER: <\/span><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/best-meme-coin-icos\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"><span data-preserver-spaces=\"true\">Best Meme Coin ICOs to Invest in 2025<\/span><\/a><\/strong><\/p>\n<h2><span data-preserver-spaces=\"true\">What\u2019s Going On? DeFi Doomsday?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">If you are an avid DeFi user, supplying liquidity, borrowing, and lending, then you have every reason to be cautious.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to DefiLlama, the total value locked (TVL) across all DeFi protocols is down by nearly double-digits in the past 24 hours. In early October, the DeFi TVL stood at over $170 billion, less than a month later, over $40Bn have been withdrawn across all protocols, especially Ethereum and its layer-2s, including Base and Optimism.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Curiously, even the most stable of them all, Aave, which is also the largest by TVL, has lost over -27% of its deposits in the past month alone. The same can be seen on Lido, whose TVL has shrunk by the same margin over the last month. On Ethena, whose algorithmic stablecoin depegged on October 10, its TVL is down 38% in four weeks.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Interestingly, on Morpho, less than -10% of assets have been withdrawn in the past month.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-305423\" src=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635.png\" alt=\"The Balancer hack and the subsequent xUSD depegging are highlighting deep-seated structural weaknesses in DeFi impacting Morpho, Euler\" width=\"1638\" height=\"653\" srcset=\"https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635.png 1638w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635-300x120.png 300w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635-1024x408.png 1024w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635-768x306.png 768w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635-1536x612.png 1536w, https:\/\/99bitcoins.com\/wp-content\/uploads\/2025\/11\/Screenshot-2025-11-05T134245.635-50x20.png 50w\" sizes=\"auto, (max-width: 1638px) 100vw, 1638px\"><\/p>\n<p><span data-preserver-spaces=\"true\">(Source: <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/defillama.com\/\" target=\"_blank\" rel=\"noopener nofollow\"><span data-preserver-spaces=\"true\">DefiLlama<\/span><\/a><span data-preserver-spaces=\"true\">)<\/span><\/p>\n<p><strong><span data-preserver-spaces=\"true\">DISCOVER: <\/span><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/crypto-presales\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"><span data-preserver-spaces=\"true\">The 12+ Hottest Crypto Presales to Buy Right Now<\/span><\/a><\/strong><\/p>\n<h2><span data-preserver-spaces=\"true\">Morpho and Euler Playing Games With User Funds?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Curious, right?<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">It simply doesn\u2019t make sense because Morpho and Euler, whose TVL is also down by over -47% in one month, are two DeFi protocols facing severe liquidity issues.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">One analyst on X alleges that the two protocols are having a rough time following the collapse of Stream Defi because they have been engaging in dangerous leverage.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Reportedly, the two have been taking user USDC deposits and dishing them out to \u201cinsolvent\u201d protocols like Stream Finance, which then \u201cleverage loop scam stables\u201d like xUSD.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">DeFi is failing its users when curators act like black boxes. The recent Beefy \u2192 Silo \u2192 Valarmore \u2192 xUSD situation proves it.<\/p>\n<p>FYI \u2013  I personally had funds and family savings in this \u201csafe USDC vault on Arbitrum\u201d promoted on Beefy.<\/p>\n<p>What we actually got was 100% exposure to\u2026 <a href=\"https:\/\/t.co\/SNjuqHB4ye\" rel=\"nofollow\" target=\"_blank\">pic.twitter.com\/SNjuqHB4ye<\/a><\/p>\n<p>\u2014 JohnnyTime <img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/1f913.png\" alt=\"\ud83e\udd13\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\"><img decoding=\"async\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/16.0.1\/72x72\/1f525.png\" alt=\"\ud83d\udd25\" class=\"wp-smiley\" style=\"height: 1em; max-height: 1em;\"> (@RealJohnnyTime) <a href=\"https:\/\/twitter.com\/RealJohnnyTime\/status\/1985685235627921819?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">November 4, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><span data-preserver-spaces=\"true\">As it turns out, xUSD is probably dead and is likely to go down with other DeFi protocols.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">When Balancer was hacked, it only took a couple of hours before xUSD depegged, falling from $1.26 to as low as $0.24. But that was not the only thing that happened on that day. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Stream Finance, the issuer of xUSD, disclosed a separate $93 million loss tied to an \u201cexternal fund manager\u2019s mistake\u201d that led to the freezing of $160 million\u00a0 in user deposits. As a result, they had to halt all withdrawals and deposits.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets.<\/p>\n<p>In response, Stream is in the process of engaging Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP, to lead a comprehensive\u2026<\/p>\n<p>\u2014 Stream Finance (@StreamDefi) <a href=\"https:\/\/twitter.com\/StreamDefi\/status\/1985556360507822093?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">November 4, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><span data-preserver-spaces=\"true\">It turns out that xUSD, which was, following the depegging, nothing but mud, was heavily used as collateral in multiple vaults, including Morpho and Euler. <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Now, Morpho and Euler, who promised up to +18% on USDC, are left holding a big bag of worthless xUSD, as users scramble to exit.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Was this a high-profile rug pull? <\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Seems so, because Stani Kulenchov of Aave is warning that the \u201cnext Terra Luna moment\u201d could be in the works.<\/span><\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">DeFi lending lives and dies by trust. One of the biggest mistakes is trying to compare DeFi lending with AMM pools because they work in completely different ways.<\/p>\n<p>Lending only works when people believe the markets are sound, that collateral is solid, risk parameters make sense,\u2026<\/p>\n<p>\u2014 Stani.eth (@StaniKulechov) <a href=\"https:\/\/twitter.com\/StaniKulechov\/status\/1985711956037419290?ref_src=twsrc%5Etfw\" rel=\"nofollow\" target=\"_blank\">November 4, 2025<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p><strong><span data-preserver-spaces=\"true\">DISCOVER: <\/span><a class=\"general-link\" href=\"https:\/\/99bitcoins.com\/cryptocurrency\/new-cryptocurrency\/\" target=\"_blank\" rel=\"nofollow noopener sponsored\"><span data-preserver-spaces=\"true\">Best New Cryptocurrencies to Invest in 2025<\/span><\/a><\/strong><\/p>\n<div class=\"nnbtc-key-takeaways\">\n<h2 class=\"nnbtc-key-takeaways__title\">Balancer Hack, xUSD Depeg, Morpho and Euler Troubles<\/h2>\n<ul class=\"nnbtc-key-takeaways__list\">\n<li class=\"nnbtc-key-takeaways__list-item\">\n         <span data-preserver-spaces=\"true\">Balancer hacked for over $128M<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span>    <\/li>\n<li class=\"nnbtc-key-takeaways__list-item\">\n         <span data-preserver-spaces=\"true\">Stream Finance\u2019s xUSD depegged<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span>    <\/li>\n<li class=\"nnbtc-key-takeaways__list-item\">\n         <span data-preserver-spaces=\"true\">Euler and Morpho are facing liquidity challenges <\/span>    <\/li>\n<li class=\"nnbtc-key-takeaways__list-item\">\n         <span data-preserver-spaces=\"true\">Expect a \u201cTerra Luna Event\u201d?<\/span><span data-preserver-spaces=\"true\">\u00a0<\/span>    <\/li>\n<\/ul><\/div>\n<p>The post <a href=\"https:\/\/99bitcoins.com\/news\/altcoins\/balancer-hack-uncovers-hidden-defi-frauds-as-xusd-depeg-threatens-morpho-and-euler\/\">Balancer Hack Uncovers Hidden DeFi Frauds As xUSD Depeg Threatens Morpho And Euler<\/a> appeared first on <a href=\"https:\/\/99bitcoins.com\/\">99Bitcoins<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Get your money out of Morpho and Euler! That\u2019s the unfortunate clarion call when Bitcoin, Ethereum, and some of the top cryptos to buy dangerously plunged to crucial support levels. It is a worrying message that only raises more questions than answers. How come? Morpho and Euler are nothing but blue-chip DeFi protocols cumulatively managing [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-56818","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/56818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=56818"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/56818\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=56818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=56818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=56818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}