Compound has suspended multiple stablecoin lending markets on Ethereum in response to the Elixir liquidity crisis

DeFi research and risk management company Gauntlet previously recommended that the Ethereum lending protocol Compound implement a temporary emergency pause on the following independent lending Comet markets in v3: USDC on Ethereum, USDS on Ethereum, and USDT on Ethereum. This proposal has now been approved, and after the pause, the lending markets for USDC and USDS resumed withdrawals on November 6.

Compound stated that it will gradually restore the markets while ensuring the safety of the system. This move aims to address the liquidity crisis of deUSD and sdeUSD under Elixir, both of which have been listed as collateral on Ethereum USDC, USDS, and USDT. On November 4, Stream Finance disclosed that its fund assets suffered a loss of $93 million, with Elixir bearing an exposure of $68 million, leading to a liquidity crisis for its stablecoins deUSD and sdeUSD.