Place/Date: - December 14th, 2020 at 7:44 pm UTC · 4 min read Source: Hedget Protocol
This year saw DeFi (decentralised finance) explode in popularity, and with the current total value locked in DeFi sitting at over $14 billion, many users are enjoying high USD-denominated yields that dwarf the traditionally low interest-rates they are used to. With DeFi protocols, users can not only earn interest on their deposits but they can now borrow assets with crypto collateral and can trade derivatives too, all in a completely decentralised manner.
But with high yield returns come higher risks, and cryptocurrencies are still highly volatile assets. Sudden price fluctuations mean that liquidation is still a very real and present danger; a drop in the price of ETH along with blockchain congestion was the catalyst for a total of 3994 liquidations worth over $8 million taking place during the MakerDAO incident dubbed “Black Thursday” on March 12th 2020.