#Write2earn DeFi Protocols Face Major Liquidations Amid Crypto Market Turbulence
#DeFiLiquidation #AAve #WrappedETH $AAVE Record Liquidations on Aave v3
Aave v3: Processed $253.4 million in liquidations on August 5, accounting for 59% of its all-time liquidations, totaling $428.9 million.
Top Assets: Wrapped ETH (WETH) led with $146.7 million, followed by Wrapped stETH (wstETH) at $68.4 million, and Wrapped Bitcoin (WBTC) at $24.3 million.
Interest rates on ETH deposits temporarily spiked to 14%, later dropping to 2%.
Market-Wide Sell-Off
Crypto Declines: Bitcoin fell 13%, Ethereum 20%, and Solana 16%, pushing the crypto market below $2 trillion.
Global Impact: Japan’s Nikkei 225 dropped 12.4%, South Korea’s KOSPI fell 8.77%, and Taiwan’s Taiex decreased 8.35%.
DeFi Margin Calls
Other Protocols: MakerDAO’s Spark Protocol saw $35 million in liquidations, 80% of its total. Compound faced $34.8 million in margin calls, led by WBTC ($22M), WETH ($9.37M), and Chainlink (LINK) ($2.85M).Additional Liquidations: Morpho Blue hosted $18.1 million in liquidations. Lido’s stETH dropped from over 0.999 ETH to 0.983 ETH before rebounding to 0.99 ETH.
Potential Market Rebound
Signs of Capitulation: Santiment analysis suggests heavy liquidations could indicate an end to the downturn, potentially followed by market rebounds due to opportunistic buying.
DeFi Sector Impact
TVL Drops: The DeFi sector’s total value locked (TVL) dropped to $111.5 billion, its lowest since February, with over $24 billion wiped out in one day, marking a 17% decrease.
Conclusion
The recent liquidations underscore the volatility and interconnectedness of the DeFi and crypto markets. Investors should stay vigilant during these uncertain times.