An Ethereum whale lost over $106 million when their position was liquidated on the decentralized finance (DeFi) platform, Sky.
The whale had 67,570 Ethereum (ETH) worth about $106 million. This happened after Ethereum’s price dropped by 14% on April 6, from over $1,800 to around $1,547.
The whale’s collateralized debt position on Sky fell below the required overcollateralization ratio, triggering the liquidation.
When this happens, the platform automatically sells the whale’s Ethereum to pay off the loan, which is what led to the huge loss.
Sky serves as a DCA collateral-based loaning platform where users can borrow off crypto assets such as Ethereum and DAI and lend them out as stablecoins. Each user is assigned a withdrawal limit based on their deposits.
If the value of Ethereum goes down too much, and the ratio gets too low, the platform will liquidate its position and sell the traders’ Ethereum to repay the loan. That’s exactly what happened here. When Ethereum’s price dropped, the whale’s position became too risky, so Sky sold the Ethereum to pay back the borrowed DAI.
Meanwhile, the entire crypto market was hit on the same day. The overall crypto market value dropped by around 5%, bringing the total market cap to $2.5 trillion. Bitcoin also dropped below $78,000, and many other big cryptos like XRP, BNB, and Solana saw their prices fall by 10% or more.
The ETH/BTC trading pair also fell to its lowest level since March 2020, which resulted in the trading pair Ethereum being valued against Bitcoin also seeing a decline.
This dip is primarily blamed on the outlook resulting from President Donald Trump’s tariff war with other countries.
Meanwhile, there was another investor who was close to liquidation after borrowing DAI with 56,995 wrapped Ethereum worth about $91 million, as per a report from Lookonchain.
Right now, the whole crypto market is feeling the pressure, and over 320,000 traders have been liquidated in the last 24 hours, losing nearly $1 billion.
While the dip has caused devastating losses for most traders, some large-scale investors consider now to be the most opportune time to buy
One investor, called “7 Siblings,” just bought 24,817 ETH for $42 million, increasing their holdings to over 1.2 million ETH, which is now worth $1.9 billion.
Also Read: Bitcoin has strayed from its original vision: Jack Dorsey
