The recent volatility in the cryptocurrency markets has triggered a spike in liquidations on many Ethereum lending platforms. April’s liquidation volume on these platforms has already surpassed the monthly highs observed in recent years, despite the month being only halfway through.
Liquidations are among the most common events, and they mostly happen within two major lending protocols, Aave and Compound, whose volumes amount to $80 million and $50 million, respectively. These are two major market centers through which all the month’s liquidations have been going. They account for more than 90% of the liquidations so far in the year.
The last time market spec was liquidated at such a high level was in June 2022, just after the $40 billion Terra ecosystem fire collapse, which ended up as a forced liquidation platform across lending platforms.
In addition to the lending markets, traders who had placed bullish bets on the market have also faced significant liquidations. According to data, crypto liquidations have totaled nearly $1.7 billion over the past three days, with the majority of these liquidations affecting long positions.
The recent market troubles have also put the financial security of well-known industry leaders at risk. Colin Wu reported that the crash in the price of CRV threatened to liquidate Curve founder Michael Egorov’s loan.
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