The February 22 crypto crash sparked the second-largest volume of DeFi liquidations in industry history, with more than $ 24.1 million in loans forcibly closed within 24 hours.
According to crypto data aggregator DeBank, $ 13.7 million, or nearly 60% of the losses, occurred on Compound, followed by Aave with $ 5.4 million in liquidations.
Yesterday’s liquidations were the second largest to hit DeFi, behind the $ 93 million in margin calls that were triggered by a sudden rise in the price of DAI on November 26, 2020. The incident saw DAI soar 30% stake on Coinbase Pro – the source of Compound’s price oracle – liquidating more than $ 88 million in crypto loan guarantees on the protocol.
DeBank also reported a drop in the total blocked value from $ 44.5 billion to $ 38.8 billion in the past 24 hours. The 12.8% drop marks the biggest daily drop since DeFi markets lost 15.4% on January 21.
The liquidations may have been exacerbated by recent extreme gas charges associated with using the Ethereum mainnet, with traders being listed up to $ 30 for simple token transfers.
As crypto users rush to outbid and ensure their trades are honored, network congestion amid rapidly falling prices may have prevented some traders from closing their positions on time.
The flash crash had a devastating impact on margin traders as well as DeFi users, with Kraken users also demanding compensation for the mass liquidations caused by an accelerated crash that saw ETH drop to $ 700 on Kraken as the asset changed hands for around $ 1,400. on other exchanges.
Large companies that have invested heavily in Bitcoin have also seen multi-million dollar drawdowns amid the February 22 price action, which saw $ 9,000 clear the price of BTC in just a few hours.
Tesla, which bought $ 1.5 billion on February 8, reportedly lost more than $ 200 million in the crash, while MicroStrategy, which owns the most Bitcoin of all state-owned companies, reportedly lost over $ 330 million. dollars at the time of decline.
At the time of writing, however, Bitcoin had recovered to trade at $ 50,800 to maintain a daily price drop of around 9%.