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More than $5.4 million worth of collateral has been liquidated across defi platforms in the past 24 hours.&nbsp; 
<a href="https://crypto.news/price/ethereum/">Ethereum</a> took the most brutal hit, accounting for $4.2 million of the total liquidations. According to data from <a href="https://parsec.fi/dashboard" target="_blank" rel="noopener">Parsec</a>, a further threat of destabilization if ETH drops to $3,008 could trigger an additional $24 million in liquidations. 
On-chain derivatives exchanges such as GMX, Kwenta, and Polynomial have been at the center of these liquidations, which cumulatively triggered over $52 million in the past day alone. When collaterals are liquidated in the context of defi, it means that assets pledged as security for loans are being sold off by the platform or protocol.&nbsp; 
 You might also like: <a href="https://crypto.news/bitcoin-bitmex-trading-flash-drop/"> BitMEX investigates suspicious trading that sent Bitcoin to $8.9k </a> 
<figure class="wp-block-image size-large">
 <img loading="lazy" decoding="async" width="1024" height="345" src="https://crypto.news/app/uploads/2024/03/Tokenomics-1024x345.png" alt="defi liquidation" class="wp-image-14259621">
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 ETH trading volume across defi protocols | Source: <a href="https://parsec.fi/dashboard" target="_blank" rel="noopener">Parsec</a>
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</figure> 
In <a href="https://crypto.news/defi-mozaic-finance-arbitrum-2-4-million-heist/">defi</a> lending, loans are often over-collateralized to account for the volatility of cryptocurrency prices. However, when the market price of the collateral asset, like Ethereum (ETH) in this case, drops sharply, it can trigger a liquidation event. The platform automatically sells the collateral to ensure the loan is repaid, often at a lower market value, leading to potential losses for the borrower. 
<a href="https://crypto.news/ethereum-etf-bitwise-sec-decision-may/">Ethereum</a> is trading at approximately $3,338, marking a 15% decline over the past week. The overall crypto market cap is down by 3.5% today and is faced with notable liquidation after a month-long rally.&nbsp; 
 Read more: <a href="https://crypto.news/bitcoin-microstrategy-ownership-total-supply/"> MicroStrategy now owns over 1% of Bitcoin’s total supply </a>

Defi platforms see over $5.4m in liquidations as Ethereum declines

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