The price of Bitcoin and other top altcoins is now down a significant percent so far this month. If the current momentum persists then this could be Bitcoin’s worst month in over three years.
Since major digital assets shed a large amount of value on the spot market, this triggered a slew of corresponding positions, such as bullish bets in the form of derivatives and loans, that spread out at a rapid pace. This can potentially extend the bearish impetus.
In the latest development, the cryptocurrency analytic platform, Santiment revealed that Makerdao’s collateral liquidation of Wrapped Bitcoin [WBTC] has surged to a new all-time high that too by a significant margin. The tweet read,
“Liquidations have been quite plentiful over the past few days, as $BTC and $ETH have experienced their share of major downswings along with the rest of #crypto. Our data indicates the amount of #Makerdao collateral liquidation amounts for $WBTC are at #AllTimeHighs by a wide margin.”
Meanwhile, the multi-collateral DAI repaid, in terms of Wrapped Ethereum [WETH] has also climbed to its highest levels since the market-wide pullback back on the 23rd of February this year.
Wrapped Ether [WETH], Ether [ETH], Chainlink [LINK], and Wrapped Bitcoin [WBTC], are some of the most volatile assets which makes them more prone to liquidations.
WBTC’s Approval as Collateral by Maker Governance
Last May, MKR holders had accepted WBTC as a new collateral asset in the Maker Protocol to leverage its greater liquidity to the Ethereum and defi ecosystems, as well as to decentralized exchanges [DEXs].
Wrapped Bitcoin went on t become the fourth collateral type approved by MakerDAO Governance, in addition to ETH, BAT, and USDC to open Maker Vaults for the purpose of generating Dai.
DeFi Market Takes a Beating Amidst Crash
The decentralized finance market has witnessed heavy liquidation and a massive reduction with respect to locked-in value as the market corrected. The total locked in the ecosystem fell by nearly 40% from its peak value established a couple of weeks back on the 11th of May 11 on which the day the figures climbed above $130 billion