Large-Scale Ether Holder Averts $340M Liquidation Through Timely Deposits

Ether continues to face the risk of multiple on-chain liquidations.

Key Points to know:

• Ether briefly fell to $1,788 on Monday, coming close to triggering multiple on-chain liquidations.
• A wallet avoided liquidation by adding 2,000 ETH as collateral and repaying $1.5 million in DAI stablecoin.
• Another wallet, believed to be linked to the Ethereum Foundation, deposited 30,098 ETH ($56.08 million) to reduce the liquidation risk of its position.

An Ethereum user prevented a potential $360 million liquidation cascade on MakerDAO by adding collateral just in time as ETH prices dropped.

One position, with a liquidation threshold of $1,928, was triggered during a market downturn in U.S. trading hours. Less than two minutes before liquidation and auction, the wallet owner transferred 2,000 ETH from Bitfinex as collateral and repaid $1.5 million in DAI stablecoin.

The wallet's intervention surprised observers, as it had remained inactive since November before suddenly adding collateral to save the position.

The position remains at risk, as it will face liquidation if ETH falls to $1,781 unless more collateral is added. Currently, Ether is trading at $1,928 after recovering from Monday's low of $1,788.

A wallet suspected to belong to the Ethereum Foundation, as reported by X account Lookonchain, deposited 30,098 ETH ($56.08M) to lower its liquidation price to $1,127.

While large liquidations are common in derivatives markets, decentralized finance (DeFi) protocols like MakerDAO rely solely on spot assets. This means that when liquidations occur, DeFi liquidity can struggle to absorb the sudden supply of spot assets, unlike derivatives exchanges, where leverage-driven volume helps maintain stability.

In this case, a single nine-figure liquidation on MakerDAO could have triggered a cascading effect, pushing ETH prices lower and liquidating other vulnerable positions.

According to DefiLlama, Ethereum currently has $1.3 billion in liquidatable assets, with $352 million of that within 20% of the current price.