What to know:
- Oh dear! Ethereum‘s ETH price took a nosedive of nearly 10% on Monday, sending DeFi markets into a tizzy where the token is a key collateral asset. Talk about a rollercoaster! 🎢
- In a twist of fate, a hefty DeFi loan on Sky (formerly Maker) backed by a whopping $130 million worth of ETH is teetering on the edge of liquidation, even though the borrower has thrown in another 2,000 ETH as a lifeline. 🏦
- According to DefiLlama, there are a staggering $336 million worth of assets hanging by a thread, all subject to liquidation within a 20% ETH price range. Yikes! 😱
On this fateful Monday, Ethereum’s ETH has been spiraling downwards, putting a large decentralized finance (DeFi) loan on the lending platform Sky (formerly Maker) in a precarious position. Will it survive? 🤔
The borrower, in a bit of a pickle, took out a $74 million loan in DAI stablecoin by pledging 65,680 ETH as collateral, which was worth nearly $130 million earlier today, according to a Sky vault data dashboard. Talk about a risky business! 💰
In an already shaky crypto market, ETH plummeted nearly 10% during the day to $1,820, falling below the loan’s liquidation level, which is just above $1,900. Oops! 😬
Blockchain data from Debank reveals that the borrower hastily withdrew 2,000 ETH, worth nearly $4 million at current prices, from crypto exchange Bitfinex earlier Monday and deposited the assets into the Maker vault, trying to prop up the loan’s collateral to dodge liquidation. Clever, but is it enough? 🤷♂️
After this last-minute deposit, the liquidation level for the loan stood at around $1,875, still higher than the latest price of ETH. The suspense is palpable! 😲
But wait, there’s more! It’s not just this loan that’s in hot water. There are $13.6 million worth of loans at a liquidation level of $1,857 ETH, and another $117 million of loans facing liquidation at $1,780, according to DefiLlama data. If ETH takes another tumble of 20%, a staggering $366 million of debt could be up for grabs! 💸💸
Liquidations in DeFi can wreak havoc on a collateral asset’s price, as the protocol sells off the collateral of a liquidated loan, adding to the selling pressure. It’s a wild world out there! 🌪️
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2025-03-10 22:38