Risks of On-Chain Liquidations in DeFi Sector

Introduction

The DeFi sector has experienced a successful month, but it is not without risks. One of the main concerns is the potential for on-chain liquidations triggered by a decline in the price of ETH.

On-Chain Liquidations

Currently, there is a $76.2 million position on Aave that will be liquidated if ETH crosses $1,777. Additionally, if the price falls by 20%, over $100 million will be liquidated.

Conclusion

While the DeFi sector has seen positive growth, it is important to be aware of the risks involved. Triggers such as a slight slide in the price of ETH can lead to significant on-chain liquidations. Investors should stay informed and take necessary precautions to mitigate these risks.