On-chain data shows that Ethereum's continued price slide has pushed hundreds of millions in leveraged DeFi positions to the edge of liquidation.
New on-chain data is showing that Ethereum’s continued price slide has pushed hundreds of millions in leveraged DeFi positions to the edge of liquidation.
According to data from the DeFi analytics platform DefiLlama, around $319.8 million in Ethereum-based loans are just 20% away from their liquidation threshold.
Most of these at-risk positions are concentrated in leading DeFi lending platforms, particularly MakerDAO and Compound. The data shows that if Ethereum dips below $1,800 and approaches the $1,750 level, then roughly $246 million worth of collateral could be liquidated.
Out of this sum, MakerDAO alone accounts for around $229 million, while Compound users could lose approximately $17 million.
As CryptoSlate's data shows, ETH was trading at $1,872 as of press time
A 19% drop from this level would push the asset into the danger zone, potentially triggering a liquidation cascade. Such a scenario would not only impact borrowers but could also send shockwaves across the broader DeFi ecosystem.
A liquidation cascade happens when falling prices force mass liquidations, which in turn fuel further declines and trigger more liquidations. This domino effect can lead to rapid sell-offs and increase market instability.
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