Ethereum’s ETH has been spiraling on Monday, jeopardizing a large decentralized finance (DeFi) loan on lending platform Sky (formerly Maker) of being liquidated.
The borrower in danger took out a $74 million loan in DAI stablecoin by pledging 65,680 ETH as collateral, worth nearly $130 million earlier today, per a Sky vault data dashboard.
In an already weak crypto prices, ETH plunged nearly 10% during the day to $1,820, below the loan’s liquidation level slightly above $1,900.
Blockchain data by Debank shows that the borrower withdrew 2,000 ETH, worth nearly $4 million at current prices, from crypto exchange Bitfinex earlier Monday and deposited the assets to the Maker vault, propping up the loan’s collateral to avoid liquidation.
Following the deposit, the liquidation level for the loan stood at around $1,875 price of ETH, which was still higher than the latest price of ETH.
Read more: Ether Came Dangerously Close to Massive Liquidation. Here Are Some Levels to Watch
It’s not the only DeFi loan in danger of rapidly falling ETH prices. There are some $13.6 million worth of loans at a liquidation level $1,857 ETH, and another $117 million of loans being liquidated at $1,780, DefiLlama data shows. There are some $366 million of debt to be liquidated if ETH falls another 20%, per DefiLlama data.
Liquidations in DeFi may have a significant impact on a collateral asset’s price, as the protocol sells or actions off the collateral of a liquidated loan, exacerbating the selling pressure.
