Crypto’s ‘Safe’ Yield Trade Hits $6 Billion After 2022 Blowups

When crypto platform Stream Finance collapsed late last year, after roughly $93 million in user funds were lost, it exposed a familiar fault line in digital assets: promises of “safe yield” tend to unravel when markets turn.

The failure was unsettling not only for the losses it produced, but for the mechanisms behind them. Stream had pitched itself as part of a new, more transparent generation of crypto yield products — designed to avoid the hidden leverage, opaque counterparty exposure and discretionary risk-taking that brought down centralized lenders like BlockFi and Celsius in the last cycle.

Instead, it showed how ...