Ethereum On-Chain Liquidations Reach Highest Level in 2 Years

The first two weeks of April have seen Ethereum on-chain liquidations in lending protocols surpassing $130 million, marking the highest level since June 2022.

Despite a mild recovery in cryptocurrency prices following a significant sell-off yesterday, the total value of Ethereum on-chain loans liquidated has exceeded $130 million—its highest since June 2022, within just the first two weeks of April.

According to data from The Block, the majority of these liquidations originate from two prominent DeFi protocols on Ethereum, Aave and Compound, accounting for $80 million and nearly $50 million, respectively.

Chart showing Ethereum on-chain liquidations over the past 12 months. Source: The Block (04/15/2024)

The last month to record such high liquidation volumes was June 2022, immediately following the collapse of the Terra ecosystem, with over $170 million burned. Meanwhile, the peak for Ethereum on-chain liquidations was in May 2021, totaling a staggering $677 million.

Chart showing Ethereum on-chain liquidations throughout history. Source: The Block (04/15/2024)

As reported by Coin68, the price decline of Curve Finance's CRV token threatens the borrowed funds of project founder Michael Egorov. Specifically, Michael has collateralized a total of 371 million CRV (approximately $156 million) across 5 addresses on 6 lending platforms to borrow $92.54 million in stablecoins. Speaking to The Block, Egorov stated plans to reduce the borrowed amount to mitigate the risk of collateral liquidation.

Meanwhile, centralized exchanges (CEXs) have recorded liquidation values approaching $1.7 billion over the weekend, amid concerns over potential Iran-Israel conflict triggering a Bitcoin sell-off from $69,700 to $60,600, causing many altcoins to lose 20-30% of their value within the same timeframe.

The market dump has led to reduced on-chain activities, evidenced by Ethereum gas fees dropping to their lowest levels in months.