A big DeFi liquidation costs an ETH whale $106 million.
Amid a larger market meltdown, an ETH whale $106 million whale lost more than $100 million after a significant liquidation on the lending platform Sky (previously MakerDAO). One of the biggest liquidations in DeFi’s history has resulted from the occurrence.
The incident demonstrates how susceptible DeFi protocols are to market-wide selloffs, which were brought on by Donald Trump’s tariff policies this time.
The loss happened on April 6 when an C whale was liquidated on Sky due to its failure to maintain the necessary collateralization ratio, according to Cryptonews.com. About $106 million, or 67,570 ETH, was lost by the user.
How it happened
Due to Sky’s overcollateralized lending methodology, borrowers must deposit a substantial amount of ETH over the borrowed DAI’s value. Collateral ratios decrease when ETH’s market value declines, leaving investments open to automatic liquidation.
Sky’s liquidation system came into play when ETH fell to a 7-month low of $1,547, the biggest one-day decline since October 2023.
DeFi Explore and Lookonchain claim that when the user’s collateral ratio dropped to 144%—below Sky’s minimum threshold of 150%—the liquidation was initiated. As a result, the protocol was able to confiscate the user’s Ethereum collateral and auction it off.
One of the most spectacular DeFi liquidations ever documented occurred when the whale’s enormous position was destroyed in a matter of hours.
Wider panic across the market
The incident wasn’t isolated. According to Spot On Chain, another large holder, who had 56,995 wrapped ETH $91M) posted as collateral, narrowly avoided liquidation by injecting emergency capital.
The liquidation price dropped to $1,119.30 when a third anonymous whale, who was about to lose 220,000 ETH (worth $340M), took drastic measures by paying back $3.52 million in DAI and adding 10,000 ETH to their vault.
The entire 220,000 ETH held by the whale would be liquidated if ETH dropped to that level, but as of right now, that situation has not come to pass. ETH whale $106 million was down 11% over the previous day, trading at about $1,550 at the time of writing.
Analysts have cautioned that if the trend continues, the ETH/BTC ratio may drop significantly lower, perhaps to 0.01615 BTC (last seen in September 2019) or even 0.0128 BTC (March 2017), since Ethereum has fallen below 0.02 BTC, a crucial psychological level not seen since early 2020.
In comparison to Bitcoin, ETH has dropped 44% so far in 2025 and is still 79% below its peak in 2021, which was fueled by DeFi and NFT hysteria.
Recently, Ethereum’s price plummeted to a new two-year low following a sharp drop in the previous week. Ether investors are suffering significant losses as a result of a high-profile liquidation event and unfavorable market circumstances.
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