DeFi hit by a sell-off tsunami in May

The savage sell-off that took place in mid-May fueled volatility in the markets and led to sell-offs among numerous decentralized financial protocols. Like an earthquake, the market crash exacerbated the largest sell-off wave in DeFi’s history. The market experienced a greater amount of sell-off on May 19 than in the past two years in the DeFi space.

As part of the biweekly Market Insights newsletter, Cointelegraph Consulting partnered with Covalent to investigate the Aave, Compound and Maker liquidations. While the three DeFi protocols account for almost 50% of all the total value of DeFi locked, according For DappRadar, they saw liquidations hitting a record high of more than $ 1.17 billion in collateral recently.

The largest settlement day so far was May 19, as the three protocols together witnessed the settlement of $ 377 million worth of collateral. Aave represents $ 170 million, while Compound is not far behind with $ 147 million in liquidations, and Maker represents $ 60 million in liquidations.

The data reveals that the dynamics of recent sell-offs bear a striking resemblance to tsunami waves, the second of which occurred on May 23, when the price of Ether (ETH) plunged to $ 1,925 from its all-time high of $ 4,332. The day marks more than $ 160 million in liquidations, with Compound outperforming Aave for liquidated value.

Compound liquidations also hit a new record. Previously, the protocol faced more than $ 88 million liquidated in November as a result of the sudden surge in prices of the Dai stablecoin.