Ethereum Price Dip Forces $106M Auto-Liquidation on Sky

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Ethereum Price Dip Forces $106 Million Auto-Liquidation on Sky

Written by Aaron S.,

Editor-In-Chief

Last Updated: April 07, 2025

Key Takeaways

A 14% drop in Ethereum’s price on April 6 triggered a $106 million auto-liquidation on Sky;
Sky requires users to keep a 150% collateral ratio; falling to 144% led to forced closure;
During liquidation, Sky sells the user's ETH to repay DAI debt and returns any extra funds.

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Ethereum Price Dip Forces $106 Million Auto-Liquidation on Sky

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An Ethereum ETH $2,932.33 holder lost a large amount of funds after a price drop triggered an automatic liquidation on the lending platform Sky.

On April 6, the value of Ethereum fell by around 14%, which led to the forced closure of this investor’s position. The liquidation removed 67,570 ETH, worth roughly $106 million, from the user’s account, according to data from Lookonchain.

During a liquidation, Sky takes control of the user’s Ethereum and sells it to repay the borrowed DAI DAI $1.00 along with fees. If there is any leftover Ethereum after the debt is settled, it is returned to the user.

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Sky, previously known as Maker MKR $1,420.82 before its rebrand in August 2024, allows users to borrow its stablecoin DAI by locking up crypto like ETH as collateral.

The system follows a rule where users must deposit more value than they borrow—usually 150% or higher. This means for every 100 DAI borrowed, a user must provide at least $150 worth of Ethereum.

The platform tracks the value of the collateral constantly. If the price of ETH drops and the collateral value no longer meets the required ratio, the system steps in and liquidates the position. In this case, the investor’s ratio dropped to 144%, which fell below the minimum and triggered the process.

Meanwhile, the team behind the Conor McGregor-backed crypto project REAL has confirmed the sale failed but assured participants they got their money back. What happened? Read the full story.