On Sunday, after a sudden fall in the price of the Ethereum, a 20% large user of Defi lost $ 74 million. Cryptokitis took a loan for the air on the Defi Protokol Sky.
The fall of altcoin number one has led to the fact that the cost of a whale pledge in the Ethereum approached the value of borrowed assets.
At 23:00 in London time, the Sky protocol (the previous name MakerDao) began to put up a whale pledge for sale. The liquidators intervened and sold on the amount of $ 74 million.
This is the case when the falling price of Ethereum found even experienced investors by surprise. This event also emphasizes the software nature of Defi protocols, which do not depend on external intervention.
On the morning of Monday, Ethereum fell to a minimum of $ 1431, since, fearing a recession in the USA and in the world, investors got rid of risky assets, including promotions and cryptocurrencies.
When large liquidations of Defi occur, they reduce the price of a collateral asset, which can lead to even greater liquidations and cause domino effect.
In recent weeks, several large borrowers on Sky could hardly avoid it. At the end of March, cryptocitis was forced to replenish his provision by almost $ 90 million in order to avoid liquidation.
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Source: Cryptocurrency
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