According to data from the DeFi analytics platform DefiLlama, around $319.8 million in Ethereum-based loans are just 20% away from their liquidation threshold.
Most of these at-risk positions are concentrated in leading DeFi lending platforms, particularly MakerDAO and Compound.
The data shows that if Ethereum dips below $1,800 and approaches the $1,750 level, roughly $246 million worth of collateral could be liquidated.
MakerDAO alone accounts for around $229 million of the total, while Compound users could lose approximately $17 million.
Based on CryptoSlate’s data, ETH was trading at $1,872 as of press time
A 19% drop from this level would push the asset into the danger zone, potentially triggering a liquidation cascade. Such a scenario would not only impact borrowers but could also send shockwaves across the broader DeFi ecosystem.
A liquidation cascade happens when falling prices force mass liquidations, which in turn fuel further declines and trigger more liquidations. This domino effect can lead to rapid sell-offs and increase market instability.