On-chain Liquidations Surge in DeFi

On-chain liquidations across decentralized finance protocols on Ethereum (ETH +3.70%) have reached a new yearly high, with over $400 million in liquidated positions in the past 24 hours, according to data from Parsec Finance.

This surge comes amid significant market volatility and a broad crypto market selloff. Earlier today, Bitcoin plunged to its lowest since February, dropping below $53,000, while Ether hit a six-month low of about $2,300.

Most of these liquidations were concentrated in three main assets, significantly affecting lending protocols such as Aave. ETH collateral faced the brunt of the liquidations, amounting to $216 million over the past day. Wrapped staked ETH (wstETH) followed with liquidations totaling $97 million; wrapped bitcoin (wBTC) also saw substantial liquidations totaling $35 million.

Amid the spike in liquidation, Aave founder Stani Kulechov reported that the decentralized lending platform earned $6 million in liquidation fees.

This liquidation spike could be attributed to various factors, including sudden downward price movements across the broader market.

Meanwhile, centralized exchanges recorded futures liquidations above $1 billion in the past 24 hours, according to CoinGlass data. About $900 million of these were long leveraged positions. Over half a billion dollars of liquidations impacted Ethereum and Bitcoin traders alone.

This article has been updated with complete data on total liquidations for the day.