- A cryptocurrency whale deposited millions in Ether and Dai to MakerDAO to prevent a $300 million liquidation as Ether’s price plummeted.
- The emergency deposit followed another large Ether liquidation on Sky, with Ether falling to levels not seen since October 2023.
Amid growing investor fear, a cryptocurrency whale injected millions of dollars in emergency capital to avoid a potential liquidation of more than $300 million in Ethereum. The investor was able to prevent a large liquidation of assets.
An unidentified cryptocurrency whale was facing liquidation on a 220,000 ETH position on MakerDAO, a decentralized finance (DeFi) lending platform. To prevent this, the whale deposited 10,000 tokens, worth over $14.5 million, and 3.54 million Dai (DAI) to increase the position’s liquidation price, according to blockchain analytics firm Lookonchain.
A whale with 220,000 $ETH($340M) on #Maker just repaid 3.52M $DAI and deposited 10,000 $ETH — lowering the liquidation price to $1,119.3. If $ETH drops to $1,119.3, the 220,000 $ETH($340M) will be liquidated.
This event occurred shortly after another Ether investor was liquidated for over $106 million on the DeFi lending platform Sky. The whale in that situation lost more than 67,000 tokens when the asset’s value decreased by about 14% on April 6. Sky uses an over-collateralization ratio, typically 150% or higher, meaning users must deposit at least $150 worth of positions to borrow 100 DAI.
According to data from CoinGlass, over 446,000 positions were liquidated in the past 24 hours, with total losses exceeding $1.36 billion. This includes $1.21 billion in long positions and $152 million in short positions. Ether prices have fallen sharply by 14.5% in the past 24 hours, reaching $1,502 at the time of writing. This drop is part of a wider crypto market downturn in reaction to market conditions.
The last time ETH traded this low was in October 2023, when the crypto market was still struggling after the collapse of the FTX exchange. ETH remains 68% below its all-time high in 2021, and further price drops could lead to more liquidations for DeFi users unless they add more collateral to their positions.
Sky allows DeFi users to create collateralized debt positions by providing crypto, in this case, ETH, to borrow the platform’s stablecoin, DAI. The system monitors the value of ETH collateral relative to the borrowed DAI. If the ETH value falls and the collateral ratio drops below the minimum requirement, the position can be liquidated.
In this case, the liquidation occurred when the ratio fell to 144% as the price of ETH declined. Spot On Chain reported that another whale that supplied 56,995 wrapped ETH worth around $91 million, to borrow DAI was also close to liquidation.
In a liquidation event, Sky seizes the digital asset collateral and auctions it off to repay the borrowed DAI plus fees. Any remaining collateral is then returned to the user. Today, ETH is trading at $1,502, down 14.5% in the last 24 hours, with a trading volume of $44B.