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Liquidation Distributions: The Hidden Details of Debt
Key Insights
- Despite record low debt utilization in May, debt liquidation pressure accelerated price declines in June 2022
- Debt concentration in a few wallets proved to be more impactful than overall debt utilization
- Liquidation distributions can show where debt concentration sits and which assets are most likely to be affected in volatility
- Currently, there are three major liquidation levels around $550, $650, and $850 ETH Prices
- Celsius is the major loan at the $550 ETH liquidation point and mostly collateralized by stETH
In a volatility crisis, the granular details often trump the holistic. Who owns what assets, which assets get liquidated at each price point, and which addresses are getting liquidated? All these questions normally dwell deep in the minutia of crypto. But when prices fall over 50%, questions like these rise to the forefront.
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Dustin was previously the Enterprise research director at Messari. He has a broad focus across crypto with a particular interest in AI x Crypto, Consumer financialization, DeFi, and general infrastructure.
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