ETH Plunge Triggers $106M Liquidation on Sky Lending Platform Amid Crypto Market Downturn

A significant Ether (ETH) price drop on April 6, 2025, led to a $106 million liquidation of an investor's position on the Sky decentralized finance (DeFi) lending platform. The investor lost 67,570 ETH as the collateral ratio fell to 144%. Across the market, 320,000 traders faced nearly $1 billion in liquidations over the past 24 hours, with ETH positions heavily affected. ETH prices fell sharply, reaching levels around $1,547, a level last seen in October 2023. The broader cryptocurrency market experienced a significant downturn, with the global market capitalization decreasing substantially. This market behavior reflects heightened volatility and risk aversion among investors, influenced by macroeconomic factors and trade tensions. Sky, formerly known as Maker, requires users to overcollateralize their positions when borrowing DAI, its stablecoin. The platform's automated systems monitor collateral ratios, triggering liquidations when the value of the collateral falls below a predetermined threshold. This event underscores the risks associated with leveraged positions in DeFi and the potential for rapid losses during market downturns.