Re7 Labs Backlash Over Stream Finance Insolvency Response

Re7 Labs published an update on its response to the Stream Finance insolvency, which exposed $284 million in bad debt across xUSD, deUSD, sdeUSD, sUSDX and USDX vaults. The report detailed actions on Euler (xUSD), Plume (deUSD, sdeUSD) and BSC (sUSDX, USDX), including capped borrowings and repayment demands. The Stream Finance insolvency has sparked community backlash over delayed interventions and slow controls. Re7 Labs acknowledged early irregularities but only implemented reactive risk measures after market crashes. Liquidity in affected stablecoin vaults fell over 40%, highlighting flaws in DeFi risk management and the challenges of real-time credit risk management in decentralized systems. Traders should note the emphasis on transparent governance and proactive monitoring. The event underscores risks in stablecoin lending and the need for robust credit controls to prevent future losses.