DeFi Lenders Processed Nearly $300 Million of Liquidations on Feb. 3

As crypto markets plunged on Monday, DeFi lenders, including Aave, Compound, and Sky, each liquidated $207.84 million, $78 million, and $7.61 million, respectively, for a total of $293 million.

ETH liquidations on Compound and Aave were around $140.78 million on Feb. 3. This was followed by wBTC with $45 million liquidated on Compound and Aave. This marks the largest daily liquidations ever on Compound, and the second largest on Aave V3 after August 2024.

Several DeFi market participants noted that lending protocols were able to effectively process wholesale liquidations without incurring bad debt, a sign of the ecosystem’s maturity.

“This represents roughly 30% of all liquidations since Aave’s inception, and even more impressively, bad debt has actually decreased. This suggests that our DeFi ecosystem is built on a strong foundation,” wrote one user.

According to CoinGlass data, more than $2.37 billion of leveraged crypto positions were liquidated on Monday.

However, Bybit CEO Ben Zhou noted that the actual figure was likely far higher, highlighting Bybit's internal data, which indicated that the exchange alone recorded over $2.1 billion in liquidations.

“I am afraid that today's real total liquidation is a lot more than $2B; by my estimation, it should be at least around $8-10b,” he said.

Zhou admitted that exchanges, including Bybit, report limited data to Coinglass due to API restrictions. However, he added, “Bybit will start to PUSH all liquidation data. We believe in transparency.”

In response, an X user asked Zhou to compare the recent crypto market selloff to the FTX collapse and the COVID-19 crash. Zhou replied that they needed to dig out the data, but Monday’s liquidations were at least 4-6 times larger.