ETH Investor Faces $100M Loss After Sky DeFi Liquidation Amid Market Crash

A massive DeFi liquidation has raised eyebrows after an ETH whale was liquidated on Sky, formerly known as Maker, losing 67,570 ETH valued at approximately $106 million.

The position was wiped out as Ether (ETH) tumbled over 14% on April 6, causing the collateral ratio of the whale’s vault to fall below the critical liquidation threshold.

According to data from DeFi Explore and Lookonchain, the liquidation was triggered when the collateralization ratio dropped to 144%, just under the platform’s required 150%. This allowed the Sky protocol to seize and auction off the ETH collateral.

As $ETH plummeted, the 67,570 $ETH($106M) held by this whale on #Maker was liquidated!https://t.co/kXSkKh1H0P pic.twitter.com/IDjzbQ8P3z

Sky, a rebranded version of the MakerDAO lending platform, allows users to lock up ETH as collateral to borrow the decentralized stablecoin DAI.

The protocol enforces an over-collateralization policy, requiring users to deposit significantly more ETH than the value of the DAI borrowed.

When the market value of ETH plunges, collateral ratios shrink, and positions become vulnerable to automatic liquidation. In this whale’s case, the market crash proved catastrophic.

The timing couldn’t have been worse. With ETH falling to a seven-month low of $1,547, marking its steepest single-day drop since October 2023, the protocol’s automated liquidation system kicked into gear.

Over a few hours, the whale’s once-massive position vanished, making this one of the most high-profile liquidations in DeFi history.

The situation quickly escalated beyond a single whale. Spot On Chain reported that another large holder, with 56,995 wrapped ETH (approximately $91 million) used as collateral, narrowly avoided liquidation by making emergency capital injections.

A whale who supplied 56,995 $WETH ($90.8M) to borrow $DAI on #Maker is on the verge of liquidation, with a liquidation price of $1,564.58.

Earlier today, another giant whale was already liquidated for 67,569 $ETH ($106M) at $1,650 to repay a $74.49M loan as the price plunged!… pic.twitter.com/1GGSJjmmRI

Meanwhile, another anonymous whale, on the brink of losing 220,000 ETH (valued at $340 million), took drastic action.

A whale with 220,000 $ETH($340M) on #Maker just repaid 3.52M $DAI and deposited 10,000 $ETH — lowering the liquidation price to $1,119.3.

If $ETH drops to $1,119.3, the 220,000 $ETH($340M) will be liquidated.https://t.co/TNdyBD2IvM pic.twitter.com/xEndExRQVg

According to Lookonchain, the investor deposited an additional 10,000 ETH (worth around $14.5 million) and 3.54 million DAI to stave off liquidation.

These deposits raised the position’s liquidation threshold and temporarily bought time against further ETH price declines.

However, the scale of market-wide damage was unprecedented. CoinGlass data revealed that over 446,000 positions were liquidated in a single 24-hour window, with total losses surpassing $1.36 billion.

A staggering $1.21 billion of those were long positions, showing just how quickly bullish bets were undone. The single largest liquidation recorded was a $7 million Bitcoin position on OKX.

With Ethereum dropping below 0.02 BTC, a psychologically significant ratio not seen since early 2020, analysts warned that ETHBTC could slide further to levels last seen in September 2019 (0.01615 BTC) or even March 2017 (0.0128 BTC) if the trend continues.

ETH is now down 44% against BTC year-to-date and remains 79% off its 2021 peak when DeFi and NFT mania drove demand.

The crypto market collapse didn’t happen in isolation. The catalyst behind the rapid downturn was a wave of macroeconomic fear sparked by U.S. President Donald Trump’s announcement of sweeping tariffs.

The crypto market dropped 3% Friday as Trump’s new tariffs raised fears of a global economic slowdown.#TrumpTarrifs #CryptoMarket https://t.co/SmiMbnTGOz

On April 2, Trump unveiled a package that included a 25% tariff on vehicle imports and a baseline 10% duty on all imported goods, coupled with “reciprocal tariffs” targeting countries with trade barriers against the U.S.

The announcement sent global markets spiraling. The S&P 500 suffered its worst two-day loss in history, wiping out $5 trillion in value. Crypto markets soon followed suit.

Bitcoin dipped below $75,000, and major altcoins like Solana (SOL), Ripple (XRP), and Dogecoin (DOGE) fell by over 20% in a matter of hours. XRP broke below its 200-day moving average, SOL plunged under $100, and DOGE crashed to $0.13.

Even traditional markets weren’t spared. The Hang Seng Index dropped over 12%, while Japan’s Nikkei 225 fell nearly 7%. U.S. stock futures plunged across the board, pointing to a chaotic start to the week.

Amid the panic, safe havens like gold and the Japanese yen saw renewed demand, further draining liquidity from the crypto market.

Billionaire hedge fund manager Bill Ackman voiced concerns, urging Trump to suspend the tariffs for 90 days.

In a strongly worded post, Ackman warned of an “economic nuclear winter,” claiming the business community was rapidly losing confidence in the administration’s leadership.

The country is 100% behind the president on fixing a global system of tariffs that has disadvantaged the country. But, business is a confidence game and confidence depends on trust.

President @realDonaldTrump has elevated the tariff issue to the most important geopolitical…

“This is not what we voted for,” he said, noting that confidence is paramount in business, and the president’s current trajectory threatens to undermine that trust.

Despite the chaos, some believe this could signal the market’s bottom. Nansen Research estimates a 70% chance that the market could bottom out by June, depending on how tariff negotiations unfold.

Meanwhile, the fallout from Black Monday continues. Ethereum now trades around $1,515, and Tether (USDT) is within striking distance of overtaking ETH by market cap.

If the bloodbath continues, ETH could lose its position as the second-largest cryptocurrency entirely.

With over $1.36 billion liquidated in one day, the market’s message is clear: risk appetite is fading fast, and unless prices rebound, more whales could soon meet the same fate as the $106 million Sky liquidation victim.

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