ETH Price Drop Exposes Two Whales' $238M Maker Vaults to Liquidation Risk

The recent drop in ETH price has caused panic in the Ethereum community with now two whale's $238 million worth of Maker vaults nearing liquidation risk.

Recent volatility in the crypto market has pushed two Ethereum whales to the brink of liquidation on Maker, with two of their vaults now at risk as they hold 125,603 ETH valued at $238 million.

The two whales are on the verge of liquidation if the price of ETH drops to $1,805 or $1,787, according to a recent post from blockchain analytics firm Lookonchain.

This comes after the rapid drawdown in crypto markets which has seen several traders get liquidated from their positions.

The health rate for both the whales has reached 1.05 and 1.06, indicating a severe risk on their collateral as it reaching 1 would result in market selling of all ETH held in their respective vaults.

In the DeFi landscape, such practices like this are common with a number of traders moving their capital here and there in order to maximize profits. DeFi traders often lock their funds at one respective protocol while borrowing funds from it and using it to generate more yields.

All the user funds supplied to Maker – such as ETH in this case – are held into a non-withdrawable Vault when the supplier decides to borrow DAI against it. Maker (now known as Spark) allows users to borrow up to ⅔ amount in DAI while mandating a collateral ratio of 150% in Vaults.

At the time writing, ETH is trading near $1,870 – down 2.2% in the past 24 hours. The further downside in ETH price would make these whales lose their ETH unless they supply more ETH to their respective Maker Vaults.