An Ether (ETH) Investor Who Had a Large Position on Decentralized Finance (DeFi) Lending Platform Sky Has Been Liquidated

An Ether investor who had a large position on decentralized finance (DeFi) lending platform Sky has been liquidated to the tune of more than $100 million

An Ether investor who had a large position on decentralized finance (DeFi) lending platform Sky has been liquidated to the tune of more than $100 million as the price of Ether crashed.

The Ether (ETH) whale lost 67,570 ETH worth around $106 million when the asset crashed by around 14% on April 6, liquidating his collateralized debt position on Sky, according to Maker Vaults explorer DeFi Explore, and as observed by Lookonchain.

The Sky lending protocol, which rebranded from Maker in August, is used by DeFi participants to create collateralized debt positions by providing crypto, ETH in this case, to borrow the platform’s stablecoin, DAI (DAI).

The system uses an overcollateralization ratio, typically 150% or higher, meaning that users need to deposit at least $150 worth of ETH to borrow 100 DAI.

The protocol autonomously monitors the value of ETH collateral relative to the borrowed DAI, and if the ETH value falls and the collateral ratio drops below the minimum requirement, the position becomes eligible for liquidation.

This whale’s liquidation occurred when the ratio fell to 144% as the price of ETH plummeted.

ETH whale liquidations. Source: DeFi Explore

According to DeFi Explore, the ETH whale had borrowed 737,778 DAI, valued at around $737,777 at the time of borrowing, and in exchange, he had deposited 106,401 ETH, then worth about $154,088.

However, the value of ETH fell to around $1,560 on April 6, decreasing the collateral ratio to less than 144%, at which point the protocol liquidated the position.

After the liquidation, the protocol sold the 67,570 ETH to repay the 737,778 DAI loan plus any applicable fees. Any remaining collateral after the debt is paid will be returned to the user.

In another observation, Spot On Chain reported that another whale who had supplied 56,995 wrapped ETH, worth around $91 million, to borrow DAI was on the verge of liquidation.

At press time, the collateral ratio for this position stood at 104%, meaning that if the price of ETH drops by another 4%, the position will be liquidated by the lending protocol.

ETH price at bear market lows

ETH prices have crashed by 14.5% over the past 24 hours, falling to $1,547 at the time of writing as the wider crypto market melts down in reaction to US President Donald Trump’s tariff-induced market sell-off.

The last time ETH traded this low was in October 2023, when crypto was still deep in bear market territory, almost a year after the collapse of the FTX exchange.

ETH remains down 68% from its all-time high in 2021, and further losses are likely to see more DeFi users liquidated unless they can provide more collateral.

According to crypto derivatives data aggregator CoinGlass, 320,000 traders have been liquidated over the past 24 hours to the tune of almost $1 billion dollars. The majority of liquidations over the past four hours have been ETH positions, it revealed.