A prominent crypto whale came dangerously close to liquidation on the Maker decentralized lending platform today as volatile market conditions pushed Ethereum (ETH) prices toward critical levels. Despite frantic efforts to shore up collateral, risk remains high as ETH continues its downward trend.
On-chain data reveals that a long-time Maker user who has been active on the platform since 2021 was minutes away from being hit with a $16 million fine for a $75 million loan. The investor, who was facing imminent liquidation, quickly deposited 2,000 ETH worth over $4 million from Bitfinex to support his position.
DeFi analyst “The DeFi Dan” emphasized the urgency of the situation on X (formerly Twitter), saying: “It now appears certain that the first major liquidation will result in a $16.5 million fine. This account has not woken up since November and only has 60 minutes to avoid liquidation.”
Before the intervention, the whale’s liquidation price was approximately $1,932.08 and its debt-to-collateral ratio was 176%. The added collateral provided temporary relief, lowering the liquidation threshold to $1,836.98 and increasing the credit ratio to 171.95%.
The imminent risk comes amid a broader sell-off in crypto and equity markets, which analysts attribute to macroeconomic concerns, including President Donald Trump’s announcement that tariffs will remain in place. In addition, the lukewarm response to the White House’s first-ever crypto summit on Friday also contributed to the negative sentiment.
Bitcoin has fallen below $80,000 and ETH has fallen below $2,000 for the first time in months, increasing stress for overleveraged investors.
Despite narrowly avoiding liquidation, the whale remains in a precarious position. Market volatility means ETH could continue to fall and liquidation risks could kick in again. To further mitigate risk, the trader withdrew 1.5 million USDT and exchanged it for DAI, paying off part of the loan, lowering the liquidation price to $1,836.34.
Maker, a decentralized lending platform, allows users to borrow in the stablecoin DAI by overcollateralizing with cryptocurrencies. The platform imposes strict liquidation penalties to ensure system stability. If a vault falls below the required collateralization threshold, it faces an automatic liquidation penalty and is added to the user’s outstanding debt.
The whale in question was using an ETH-C vault with a minimum collateralization ratio of 170%. The investor temporarily bought time by injecting new collateral and reducing his debt.
*This is not investment advice.
