DeFi Saw Record Liquidation Levels In History As The Market Dips

DeFi saw record liquidation levels in history as the market dipped and triggered the second-biggest wave of liquidations with a total of $24.1 million worth of positions being wiped as per the data that we have in our latest crypto news.

The biggest amount of collateral was liquidated on Compound with $13.7 million followed by Aave with $5.4 million, as the data from DeBank shows. Previously, the biggest liquidation to date happened last year when an instant increase in the value of DAI stablecoin resulted in the liquidation of $88.4 million worth of positions on Compound while DAI’s price on Coinbase Pro, jumped by 30%.

In the past 24 hours , 474,968 traders were liquidated. In total $4.4B was liquidated!This is the craziest day in #Bitcoin futures history.
👉https://t.co/Bw2cNNXnr9 pic.twitter.com/MdYnmyXNXX

— Bybt (@bybt_com) February 23, 2021

The total dollar value locked in the Defi sector dropped from $44.5 billion to $38.5 billion which is the biggest daily TVL drop ever recorded. Bitcoin’s price dropped by $10,000 while the price of ETH on crypto exchange Kraken dropped to $700. ETH was traded at around $1400 on other exchanges. In addition to increased market volatility, the number of liquidations was catalyzed by a load on the ETH blockchain which impeded the normal operations of DeFi services and prevented traders from closing their positions on time.

Another consequence of the market drop on Monday was a drop in the value of institutional investors-owned BTC by $13.6 billion. As per the Bitcoin Treasuries, the value of 1.3 million BTC held by 41 companies dropped to $63.1 billion. Microstrategy now has about $3.465 billion worth of BTC whereas the value of the assets was estimated at $4.1 billion. In the meantime, about 475,000 traders were liquidated into the BTC futures market over the past 24 hours:

 “In the past 24 hours, 474,968 traders were liquidated. In total $4.4B was liquidated! This is the craziest day in Bitcoin futures history.”

The data shows that DeFi saw record liquidations for the first time in history in this magnitude. As reported recently, The data from Uniswap indicated that against the US dollar, coins like Uniswap and Compound as well as Yearn.Finance’s YFI slipped lower by 1-5% in the past day. the move lower could be a result of the overall trend of consolidation that is seen in the market over the past week. After the strong breakout that started a month ago, the DeFi market cooled rapidly. The DeFi market is stumbling as the key market players didn’t react well to the latest push by Ethereum to a new all-time high.