- IntoTheBlock emphasizes the importance of liquidation blocks in evaluating DeFi risk.
- The firm warns of potential collateral shortfalls if overlooked.
- Over 39,000 traders liquidated in the last 24 hours, with losses totaling $88.69 million.
In a recent report, market intelligence platform IntoTheBlock underscores the crucial role of liquidation blocks when evaluating risk in decentralized finance (DeFi) protocols. It highlighted that overlooking this metric could expose investors to the risk of insufficient collateral for loan repayment, especially if a liquidation remains open for an extended period.
Liquidation blocks refer to the number of blocks required for the liquidation process to complete. The report highlights that protocols with shorter liquidation periods offer increased security and resilience against sudden asset price decreases. This is crucial as longer liquidation periods can potentially lead to a collateral shortfall, endangering loan repayment.
In another thread, IntoTheBlock emphasizes the importance of the Health Factor Distribution indicator in assessing risks within DeFi protocols. The indicator provides a comprehensive view of the number of loans facing liquidation within a protocol, enabling investors to gauge potential risks.
In a related development regarding liquidations in the broader crypto market, data from CoinGlass, a well-known crypto derivative data analysis platform, shows that a staggering 39,934 traders have been liquidated in the last 24 hours.
The cumulative amount lost by these traders is $88.69 million, with the most significant single-order liquidation occurring on the OKX exchange for the ETH-USD-SWAP pair, with a value of $2.06 million.
The recently liquidated $88.69 million is a much lower figure compared to another liquidation event reported by Coin Edition earlier this year. Specifically, the report stated that 80,922 traders lost $243 million within a 24-hour window, with $185 million occurring in under 45 minutes.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
