An Ethereum user saved several MakerDAO positions from the brink of a $360 million liquidation cascade

An Ethereum user saved several MakerDAO positions from the brink of a $360 million liquidation cascade on Tuesday, adding collateral at the final hour as the price of ETH tumbled.

An Ethereum user intervened at the last minute to save several MakerDAO positions from a $360 million liquidation cascade on Tuesday, adding collateral and keeping the DeFi protocol afloat.

One of the positions was at risk of liquidation if the price dropped to $1,928, and this was triggered alongside a market plunge during U.S. trading hours.

The ETH was less than two minutes away from being liquidated and sold at a MakerDAO auction until the wallet owner deposited 2,000 ETH from Bitfinex as additional collateral. It also paid back $1.5 million worth of the DAI stablecoin.

The wallet in question took some by surprise by saving the position as they had previously been inactive since November.

That particular position is not yet out of the woods and will be liquidated if ETH drops to $1,781 or until the owner adds more collateral. Ether is currently trading at $1,928 having bounced from Monday's low of $1,788.

Another wallet, which according to X (formerly Twitter) account Lookonchain is suspected of being the Ethereum Foundation, deposited 30,098 ETH ($56.08M) to lower the liquidation price of its position to $1,127.

Now live: A massive $360M liquidation cascade on Maker was triggered during US trading hours today, but luckily it seems like someone intervened at the last minute to save the positions and keep Maker afloat.

A copy trader nearly lost $2M in the process. Here's what happened: 1/10

The positions began to get liquidated after a rapid market downturn. One of the positions had a liquidation price at $1,928, and the ETH dropped to this level less than two minutes later. At this rate, the position would have been fully liquidated and sold at a Maker auction.

However, the wallet, which is known for previously saving a $254M liquidation, deposited 2,000 ETH (around $3,7M) from Bitfinex to keep the position afloat. They also paid back 1.5M DAI to lower the liquidation amount and ultimately save the position.

This is interesting because this wallet has been inactive since November and only ever interacted with Bitfinex and Maker. It’s unclear why this wallet chose to intervene now after months of inactivity.

Another large position, which according to on-chain data is likely to belong to the Ethereum Foundation, was at risk of liquidation at $1,236. To avoid this, the wallet deposited 30,098 ETH ($56.08M) to lower the liquidation price to $1,127.

The coders at DeFi protocols usually use derivative instruments to hedge their liquidity from large price movements, but DeFi protocols only use spot assets. This means that when a liquidation takes place, DeFi liquidity is unable to cope with the skew of asset supply.

However, this doesn't happen on derivative exchanges as there is typically more volume and liquidity driven by leverage. In this case, just one of nine-figure liquidation on MarkerDAO would likely send the ETH price down further, liquidating the other vulnerable position in its path.

According to DefiLlama there is $1.3 billion in liquidatable assets on Ethereum, with $352 million of that within 20% of the current price.