Ethereum DeFi Liquidations

What is DeFi Liquidation Volume?

When the value of DeFi borrowers' collateral drops too far relative to the loan they have taken out, that collateral is sold off (liquidated) to pay back their debts. In decentralized finance this process is executed automatically by smart contracts.

How are Liquidations charts used?

Liquidations usually increase when there are sharp drops in the prices of assets that borrowers deposit as collateral in smart contracts in order to take out loans. A spike in liquidations is a reflection of volatile market conditions.

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