A significant event in the decentralized finance (DeFi) space has drawn considerable attention following the liquidation of a prominent Ethereum whale on the Sky platform, previously known as Maker. This incident resulted in the loss of 67,570 ETH, approximated at around $106 million.
The liquidation occurred on April 6, coinciding with a sharp decline in Ether (ETH), which slid more than 14% in value. This downturn caused the whale’s collateral ratio to drop below the crucial liquidation threshold, triggering the automatic liquidation process.
Data from DeFi Explore and Lookonchain indicates that the collateralization ratio plunged to 144%, just beneath Sky’s mandated minimum of 150%. Consequently, the Sky protocol was enabled to seize and auction off the whale’s ETH collateral.
As $ETH plummeted, the 67,570 $ETH($106M) held by this whale on #Maker was liquidated!https://t.co/kXSkKh1H0P pic.twitter.com/IDjzbQ8P3z
— Lookonchain (@lookonchain) April 7, 2025
Sky, which is a revamped version of the MakerDAO lending platform, allows users to secure loans of the decentralized stablecoin DAI by using ETH as collateral.
Under the protocol’s strict over-collateralization rule, participants must deposit significantly more ETH than the value of the DAI they borrow. When the market price of ETH experiences a decline, these collateral ratios diminish, rendering positions susceptible to liquidation, as was the case for this whale.
The market’s timing was particularly unfortunate, with ETH dropping to a seven-month low of $1,547—a sharp decline that marked the steepest daily drop since October 2023. As the automated liquidation system responded, the whale’s once-significant holdings were swiftly wiped out, marking one of the largest liquidations in DeFi history.
Whales Scramble to Save Positions as ETH Collapses
As the situation escalated, other large holders faced similar fates. Spot On Chain reported that another prominent stakeholder, who had 56,995 wrapped ETH (worth approximately $91 million) posted as collateral, narrowly averted liquidation by injecting emergency capital.
A whale who supplied 56,995 $WETH ($90.8M) to borrow $DAI on #Maker is on the verge of liquidation, with a liquidation price of $1,564.58. Earlier today, another giant whale was already liquidated for 67,569 $ETH ($106M) at $1,650 to repay a $74.49M loan as the price plunged!… pic.twitter.com/1GGSjjmmRI
— Spot On Chain (@spotonchain) April 7, 2025
In another incident, an anonymous whale holding 220,000 ETH valued at $340 million took significant measures to avoid liquidation.
A whale with 220,000 $ETH($340M) on #Maker just repaid 3.52M $DAI and deposited 10,000 $ETH — lowering the liquidation price to $1,119.3. If $ETH drops to $1,119.3, the 220,000 $ETH($340M) will be liquidated. https://t.co/TNdyBD2IvM pic.twitter.com/xEndExRQVg
— Lookonchain (@lookonchain) April 7, 2025
The investor made a series of strategic moves by depositing an extra 10,000 ETH, valued around $14.5 million, and repaying 3.54 million DAI. These transactions elevated the liquidation threshold of their position, providing temporary relief against additional ETH price declines.
Nonetheless, the widespread damage incurred across the market was staggering. CoinGlass reported that over 446,000 positions were liquidated within a mere 24-hour span, leading to total losses exceeding $1.36 billion.
A staggering $1.21 billion of these losses were associated with long positions, highlighting the rapid unraveling of bullish investments. The largest individual liquidation was a $7 million Bitcoin position on OKX.
With Ethereum dipping below 0.02 BTC, a psychologically important ratio not seen since early 2020, analysts warned that the ETH/BTC ratio may continue to decline, potentially revisiting values last observed in September 2019 (0.01615 BTC) or even March 2017 (0.0128 BTC).
This year, ETH has fallen 44% against BTC and remains a substantial 79% below its peak in 2021 when demand surged due to DeFi and NFT trends.
Trump Tariffs Trigger Global Panic and Crypto Meltdown
The recent turmoil in the crypto market is linked to broader economic concerns, particularly a wave of anxiety triggered by U.S. President Donald Trump’s announcement of significant tariffs.
The crypto market dropped 3% Friday as Trump’s new tariffs raised fears of a global economic slowdown. #TrumpTarrifs #CryptoMarket https://t.co/SmiMbnTGOz
— Finance Newso.com (@Finance Newso) April 4, 2025
On April 2, Trump announced a tariff package that included a 25% tax on vehicle imports and a baseline 10% duty on all imported goods, along with “reciprocal tariffs” aimed at nations imposing trade barriers against the U.S.
This announcement reverberated through global markets, leading to the S&P 500 experiencing its most significant two-day loss in history, erasing $5 trillion in value. The crypto markets were similarly affected.
Bitcoin saw a decline below $75,000, while major altcoins such as Solana (SOL), Ripple (XRP), and Dogecoin (DOGE) plummeted by over 20% in mere hours. XRP dipped below its 200-day moving average, SOL fell beneath $100, and DOGE crashed to $0.13.
Traditional markets also faced severe losses, with the Hang Seng Index dropping over 12% and Japan’s Nikkei 225 falling nearly 7%. U.S. stock futures tumbled across the board, indicating a tumultuous week ahead.
As panic spread, safe-haven assets like gold and the Japanese yen saw renewed interest, further exhausting liquidity within the crypto space.
Billionaire hedge fund manager Bill Ackman expressed concern, urging Trump to postpone the tariffs for a period of 90 days.
In a pointed statement, Ackman warned of an “economic nuclear winter,” emphasizing that the business community was swiftly losing faith in the administration’s governance.
The country is 100% behind the president on fixing a global system of tariffs that has disadvantaged the country. But, business is a confidence game and confidence depends on trust. President @realDonaldTrump has elevated the tariff issue to the most important geopolitical…
— Bill Ackman (@BillAckman) April 6, 2025
“This is not what we voted for,” he remarked, highlighting that trust is crucial in business, and the current trajectory poses a threat to that confidence.
Despite the turmoil, some market analysts speculate that the current environment might indicate a bottoming out. Nansen Research assigns a 70% chance that the market could stabilize by June, contingent on the outcome of tariff negotiations.
As the aftermath of what many call Black Monday continues, Ethereum trading is around $1,515, with Tether (USDT) nearing Ethereum in market capitalization.
If the bearish trend persists, Ethereum risks losing its status as the second-largest cryptocurrency by market cap entirely.
The liquidation of over $1.36 billion within a single day sends a stark message to the market: risk appetite is dwindling quickly, and without a price recovery, more whales could soon find themselves in a situation similar to the $106 million loss experienced during the Sky liquidation.
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