Original author: Pzai, Foresight News
Yesterday, as the global market experienced huge shocks, the crypto market was not immune. On the chain, the Ethereum ecosystem alone set a record of more than 350 million US dollars in liquidations in a single day. The "one wave" of the market is stimulating the "ten thousand waves" of DeFi, and how do DeFi projects respond? Who is swimming naked when the tsunami recedes? Therefore, the author wrote this article to summarize the performance of DeFi under market fluctuations.
Stablecoins
As for Ethena, its stablecoin USDe set a record of $95.8 million in outflow in a single day yesterday, and the total supply also fell from 3.6 billion at its peak to around 3.1 billion. Due to Ethena's mechanism, long positions must be maintained at a high level. As the market falls, the potential liquidation of collateral causes users to control risks and then redeem related tokens.
In addition, the stablecoin USDB on Blast briefly de-anchored to a minimum of $0.937 yesterday. Since the stablecoin ecosystem of Blast is relatively closed, and the project party has a large incentive for USDB in the early stage of the Blast chain launch, the outflow of funds during market fluctuations has a greater impact. Now USDB has basically returned to its anchor.
Loan Agreement
In terms of liquidation, the most serious liquidation occurred on August 5, with an overall scale of more than $350 million. In terms of protocol allocation, Aave V3 had the largest liquidation amount, reaching $250 million. Compound liquidation was second, with a total liquidation amount of $79.6 million. In Aave V3's liquidation, the main focus was on Ethereum's major asset liquidations, with the top three being WETH, wstETH, and WBTC.
Amid market volatility, Aave also earned more than $6 million in revenue.
After the liquidation was completed, the overall liquidation line on the chain was below $2,000. In liquidation, due to the characteristics of the mechanism, bad debts are prone to occur when the market fluctuates greatly. For example, Aave V3 has generated a total of $350,000 in bad debts in the past seven days. In contrast, Curve Llamalend avoids most hard liquidations due to its soft liquidation mechanism, of which soft liquidation took on a liquidation share of $50.24 million on August 5.
Overall, the lending protocol’s response to this market volatility was satisfactory.
Decentralized Exchange (DEX)
In Uniswap V3, the peak was reached on August 5th at $840 million, and generated $1.119 million in fees for LPs.
As for GMX, on August 5, its positions dropped by about 30% compared with the previous day, and it liquidated $8.3 million in assets, mainly in USDC.
Re-pledge
As one of the core assets of Ethereum today, re-pledged assets have experienced significant outflows under market fluctuations. For example, Renzo's pledged token ezETH detached to a minimum of 0.876 WETH.
In terms of protocol outflow, taking ether.fi as an example, 79,013 ETH were withdrawn on August 5, with a total value of more than 100 million US dollars, most of which were eETH withdrawals from Eigenlayer. With a liquidity of more than 77,000 ETH and a DeFi utilization rate of more than 73%, the protocol does not have an overall run risk.
Overall, the Lido stETH withdrawal queue has not shown a significant growth trend, and the main LST on the chain has remained stable. Therefore, there is no systemic risk in the re-staking ecosystem as a whole.
References：
https://parsec.fi/layout/cryptoian/_N3 3 MkeM
https://community.chaoslabs.xyz/aave/risk/liquidations
https://dune.com/ether_fi/etherfi
https://dune.com/hildobby/ethena
