2025-03-11
Ethereum (ETH) fell nearly 10% on Monday, dropping to $1,900. This
sharp decline is putting pressure on decentralized finance (DeFi) markets,
where ETH is used as collateral for loans.
One major loan on the Sky (formerly Maker) platform, backed by $130
million worth of ETH, is at risk of liquidation.
The borrower had taken out a $67 million loan in DAI stablecoin
using 64,7920 ETH as collateral.
To prevent liquidation, they added 2,000 ETH (worth around $4
million) and later deposited $1.6 million in DAI to reduce the debt to $73.1
million.
However, the liquidation level remains dangerously close at an ETH
price of $1,836.
DeFi data from DefiLlama shows that about $336 million worth of
loans could be liquidated if ETH drops another 20%.
Currently, $13.6 million in loans will be liquidated if ETH falls to
$1,857, and another $117 million will be triggered at $1,781.
When liquidations happen in DeFi, the collateral (ETH) is sold off,
increasing selling pressure and potentially pushing prices down further.
