Stellar DeFi TVL Plunges 60% Post $717K Blend Exploit, XLM Holds $0.18 Amid 10% Correction Warning

Stellar's decentralized finance (DeFi) sector is sounding the alarm after its total value locked (TVL) cratered from $270 million on August 22 to roughly $98 million by August 27—a 60% freefall triggered by the $717K exploit of the Comet AMM BLND-USDC pool, the critical backstop for Blend protocol. As the ecosystem reels, analysts warn of a potential 10% correction for XLM, which currently clings to the $0.18 support level. Despite the breach exposing liquidity vulnerabilities, the broader market resilience is being tested, with investor sentiment turning cautious and price action increasingly correlated with macroeconomic headwinds.

Comet AMM Blend Exploit Triggers Sharp TVL Decline

DefiLlama data shows that Stellar Lumens’ ecosystem saw its TVL drop 60% within a single day, reaching just $98 million as of August 27. The exploit, involving a vulnerability in same-asset USDC swaps, led to a loss of around $717,000 from the pool, which prompted Blend protocol operators to pause its backstop pool. As a result, Blend’s TVL fell from over $150 million to nearly zero, amplifying the pressure on the broader Stellar DeFi landscape.

Mini dictionary: Comet AMM, Blend protocol — Comet AMM is an automated market maker used for decentralized trading on Stellar, while Blend protocol is a decentralized lending and borrowing platform backed by liquidity pools such as BLND-USDC.

Market Resilience Despite DeFi Crisis

While the DeFi incident exposed vulnerabilities, Stellar’s network fundamentals appear strong in other areas. The tokenized real-world asset (RWA) market on Stellar now exceeds $3 billion, highlighting continued demand and activity outside the affected protocols.

Stellar Lumens (XLM) traded down by 2.82% to $0.18 after the exploit but has managed to sustain levels above its major support area for eight straight days. According to SoSoValue’s price tracking, XLM’s performance has been buoyed, despite short-term pressure from the exploit and resulting liquidations.

XLM’s price action has shown resilience amid the exploit, remaining above $0.18 for over a week and sustaining a 5% gain over the past 30 days, even as investor sentiment wavers.

Volatility and Investor Sentiment

XLM’s recent session saw heightened volatility, with market indicators offering mixed signals. The Chaikin Money Flow (CMF) remains slightly negative on both 4-hour and daily charts, reflecting cautious investor sentiment. Meanwhile, the one-hour chart points to neutrality, as top buyers remain on the sidelines.

At press time, XLM trades a cent above its SuperTrend price of $0.1707, providing a narrow advantage for bullish positions. In futures markets, traders holding long positions faced $191,330 in liquidations out of $205,610 over the past 24 hours. Despite the setback, XLM’s open interest funding rate has stayed positive for ten consecutive days.

The nearest bullish target for XLM is now set at $0.195, while the token’s price continues to move in close correlation with Bitcoin. As the leading cryptocurrency pulled back to $78,700, XLM mirrored the broader trend, although it maintained positive momentum over the past month.

Price Correlation and Broader Market Context

Stellar’s price movements have closely tracked Bitcoin’s recent market action, with both assets experiencing similar percentage shifts. Over the last 30 days, XLM’s price edged 5% higher, reflecting some degree of market confidence even in the face of protocol-specific issues.