The collapse of some key decentralised finance players (DeFi) is being linked to the huge falls in cryptocurrency prices as holders panic.
-- The record-setting rout in cryptocurrencies has put a slew of decentralised-finance applications and their communities in a race to protect themselves against a cascade of liquidations -- sometimes by employing unprecedented measures.
Alex Mashinsky, founder and chief executive officer of Celcius. The DeFi platform had to suspend withdrawals last week.DeFi apps -- in which users can trade, borrow from and lend to each other without intermediaries like banks -- are suffering because they tend to be interconnected, and troubles in one can have cascading effects on others.
“A lot of DeFi protocols are reducing counterparty exposure during this volatile time,” said Paul Veradittakit, a partner at Pantera Capital. By taking over the account, the Solend team could attempt to liquidate the position in such a way that the liquidated tokens’ price is less affected, through an over-the-counter sale with a specific buyer rather than on a DeFi exchange.
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