According to Blockchain tracker Lookonchain, on April 6, Decentralized Finance (DeFi) faced one of the biggest losses, with large Ethereum (ETH) investors losing more than $106 million during a sudden market crash. Ethereum Whale lost 67.5K ETH after the price decline on April 6.
This loss occurred on Sky, the top DeFi platform. The entire crypto community was shaken as ETH prices dropped by more than 14% in just one day. This loss marks a major moment for crypto, as its week was already unstable. This shows how risky it might be to borrow or invest heavily using digital assets on a decentralized platform
Ethereum Whale Liquidates For 67,570 ETH
The wallet addresses were tracked using DeFi Explore, a tool used for monitoring activity on market platforms. In total 67,570 ETH, worth $106 million, were deposited by users as collateral for borrowing the DAI stablecoin.
The value of the collateral wasn’t enough to meet the safety margin of the platform, it dropped below the safety level of 150% to just 144%, which caused an automatic Liquidation.
Once the collateral level dropped below the required limit of 150%, Sky’s smart contracts took action and automatically liquidated the position. The platform took control of ETH from Ethereum whales and started a Dutch auction for selling assets and using this fund to repay the DAI loan along with any related fees.
Sky makes use of a system known as overcollateralized debt positions, which means users must deposit more crypto than the amount of Dai that they borrowed. This system helps to protect the platform from any losses, but it puts users at risk of quick liquidation if the value of their crypto drops suddenly.
ETH Hits Lowest Price Since October 2023
Ethereum had faced a sharp decline, its prices went from $1800 to $1,528 in just one day, this is its biggest single-day drop in months.
The last time ETH saw such a drop was in October 2023, when the market was still recovering from major crashes, which included the fallout from the FTX collapse.
Ethereum reached its peak price in November 2021, which was around $4,878. This makes the current value over 68% lower; this drop has given rise to concerns regarding deeper market correction, especially in the DeFi space.
Trump’s New Tariffs Shake Global Markets and Crypto Investors
This week’s crypto market drop seems to be caused by global economic news. Experts suggest that it might be triggered by U.S. President Donald Trump’s surprise announcement of major tariffs on goods from China, which shook the stock markets around the world and spilled over into crypto.
Crypto assets are often seen as uncorrelated to traditional financial markets, but lately, they have been reaching more global economic events. The crypto market responded with high volatility and Liquidation when the U.S. Stocks dropped and Treasury yields jumped.
Conclusion
The recent liquidation of Ethereum Whale highlights the risk which is associated with borrowing and investing in digital assets on a decentralized platform. The sudden price drop automatically triggered liquidation, showing the volatility and unpredictability of the crypto market. Investors must be aware and should remain cautious of potential risks and consequences of market fluctuations.
FAQs
1. Ethereum Whale sold how many ETH?
Ethereum whales sold around 67.5K ETH worth of $ 106 M.
2. Liquidation took place on which DeFi platform?
The recent liquidation of 67.5K ETH took place on the Sky platform.
3. Which tool tracked the whale’s address?
The DeFi Explore tool was used to track the address.
4. ETH price dropped by how many percent?
Ethereum price dropped by 14%
5. What is the safety margin on Sky?
It is 150% of the borrowed amount.
Glossary
Ethereum Whale- An Individual group holding a large amount of ETH
Liquidation- Auto Selling of crypto
Collateral – Crypto deposited to borrow another token.
DAI- A stablecoin with a fixed value
Dutch Auction- A sale in which the price drops until someone buys.
Sources
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