ETH Whales Face Immense Liquidation Amid A Crypto Bloodbath

Decentralized Finance Lending Platforms Have Seen Liquidations As A Result Of The More Than 16% Decline In ETH Pricing.

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As the price of Ether plummeted, an Ether investor with a sizable stake in the decentralized finance (DeFi) lending platform Sky was liquidated for more than $100 million.

According to Maker Vaults explorer DeFi Explore and Lookonchain, the Ether whale liquidated his collateralized debt position on Sky after losing 67,570 ETH, or around $106 million, when the asset plummeted by about 14% on April 6.

DeFi members use the Sky lending protocol, which changed its name from Maker in August, to establish collateralized debt positions by lending the platform's stablecoin, DAI, with cryptocurrency—in this case, ETH.

Because of the system's over-collateralization ratio, which is normally 150% or above, users who wish to borrow 100 DAI must deposit at least $150 in ETH.

The position is eligible for liquidation if the ETH value and the collateral ratio fall below the minimal threshold. The protocol automatically checks the value of the ETH collateral in relation to the borrowed DAI.

When the price of ETH crashed and the ratio dropped to 144%, this whale was liquidated.

                                                                                                 Source: DeFi Explore

Another whale who provided 56,995 wrapped ETH, or about $91 million, to borrow DAI was about to go out of business, according to a report by Spot On Chain.

The ETH collateral is seized by Sky during a liquidation event and sold at auction to cover the cost of the borrowed DAI plus fees. The user receives back any collateral that remains once the debt has been paid.

The price of Ethereum is at a bear market low

Priced at $1,496 at the time of writing, ETH has plummeted 16.41% in the last day as the whole cryptocurrency market collapsed in response to US President Donald Trump's tariff-induced market sell-off.

Nearly a year after the FTX exchange collapsed, in October 2023, when cryptocurrency was still in the depths of a bear market, ETH last traded at this level.

Since ETH is still 68% below its peak in 2021, more DeFi members will probably be liquidated if they are unable to produce further collateral.

CoinGlass reports that 320,000 dealers have been liquidated for nearly $1 billion in the last 24 hours. It showed that over the last four hours, ETH positions have accounted for the majority of liquidations.

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