Liquidation Risk Covers Lending Platforms

The down market led to a series of depreciated tokens, making investors’ psychology chaotic. Followed by a massive liquidation that made a series of investment funds lose liquidity.

Massive liquidation market

Since the cryptocurrency market has been continuously going down lately, the prices of major coins are taking a heavy hit. As a result, many crypto mortgage orders on major lending platforms such as Aave, Compound, Maker on Ethereum have been massively liquidated in recent times in the direction of the downward trend of ETH price, typically the position of investment fund Three Arrows Capital, creating more selling pressure on the market.

Another struggling lending project, Celsius, also has many “terrible” loan orders, but because it is timely to top up collateral, it temporarily avoids the risk.

On the morning of June 19, the Ethereum community had a howl when a mortgage of 152,000 ETH (more than $ 150 million) on Aave was almost liquidated. Although ETH once dumped to 881 USD, lower than the 895 USD liquidation price of the loan order, because the volatility happened so fast that oracle Chainlink did not have time to update the price for Aave, so this order has not been liquidated. This wallet is believed to belong to Cai Wensheng, the founder of the popular Chinese photo editing app Meitu.

However, a mortgage request of 71,863 ETH (more than $66 million) on Liquity was liquidated on June 18. This is the largest liquidation order in project history.

On June 19, Bitcoin lost the $20,000 mark, at one point touching just under $18,000, the total liquidation amounted to $572 million from more than 150,000 traders. In which, Long accounted for 65%.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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