Elixir announces the cessation of operations "passing the baton to the community", deUSD exits after termination.

Elixir has terminated the operation of deUSD, handing over the remnants of the protocol to the DAO, sparking controversy over whether decentralization has become a scapegoat tool. (Background: A review of stablecoins that have been depegged in the past 5 years: from algorithmic to centralized, none are spared) (Supplementary background: Surviving strategies for retail investors in a bear market as low-risk DeFi arrives) The synthetic dollar protocol Elixir officially announced this week that the stablecoin deUSD will enter a “sunset phase” starting November 2025, with the team no longer participating in subsequent operations. In the coming weeks, on-chain governance and the disposal of remaining assets will be fully handed over to token holders. For a project that once managed over $1.5 billion in assets, this is not just an operational team wrapping up, but rather pushing “decentralization” to its most controversial conclusion, with massive losses appearing on the books and the founding team choosing to step back. Claims contracts 2 and 3 are now live. Holders of sdeUSD and deUSD unrelated to Stream can redeem USDC 1-1 here: https://t.co/oLOYNRdJgX With the sunsetting of deUSD, we aim to hand the protocol to the community in the coming weeks. Validators are advised to keep an eye out for… — Elixir (@elixir) November 28, 2025 False prosperity propped up by recursive leverage According to analysis, Elixir's previous key partner Stream Finance has reported about $93 million in bad debts, with a single default of $68 million directly hitting the balance sheets of two protocols. The “recursive lending” mechanism used by Elixir and Stream is similar to two people signing IOUs to pledge, where the lender sees a high collateral amount, but in reality, it is just the same risk loan accumulated through leveraged cycles. When Stream failed to perform, the actual value of deUSD collateral plummeted, and the support ratio fell to 35% within hours. Market discount selling pressure surged, causing the stablecoin to lose its peg instantly, dragging down the entire liquidity pool, and leaving deUSD heavily injured with no choice but to exit. Follow-up plan The Elixir team subsequently initiated a “dual-track” disposal, where about 80% of ordinary holders, who did not participate in the Stream lending pool, could exchange USDC 1:1 through the remaining reserves of the protocol. After the redemption window opened, most retail investors had already exited. Conversely, core participants who provided deep liquidity to Stream faced a principal gap of 60% to 70%. Whether losses can be recovered through lawsuits or liquidation in the future depends on cross-chain asset positioning and jurisdiction, with high time costs and uncertain outcomes. Additionally, according to the Elixir team's original data, the company is registered in tax havens like the Cayman Islands, making accountability difficult. Is “community takeover” empowerment or shirking responsibility? After completing the easier retail redemption, Elixir announced that the governance rights of the protocol, the rights to upgrade smart contracts, and subsequent rewards distribution would be transferred to the DAO. On the surface, this aligns with the blockchain principle of “decentralization”; in reality, the founding team is shedding legal and debt pressures, leaving behind a hollow shell with declining productivity and imbalanced assets and liabilities. If a traditional company is insolvent, it usually enters bankruptcy proceedings, led by the court for liquidation. In the on-chain world, token holders are both shareholders and liquidators, needing to pay for their own legal fees, negotiation costs, and even vote on whether to continue maintaining validator nodes. “Community takeover” feels more like passing the hot potato to the public. Related reports Stream's xUSD depegged to $0.2! Understanding how these protocols “self-print money” Fantom Chain | DEUS Finance was attacked, hackers stole $13.4 million, and tokens plummeted by 13%. <Elixir announces giving up operations 'handing over to the community', deUSD exits with a flourish> This article was first published in BlockTempo, the most influential blockchain news media.