XRP Liquidations on Morpho Protocol Reach 883 Events
Investors lost 4.18 million cbXRP as 53.5 million dollars in debt remain outstanding
The Morpho lending protocol recorded 883 liquidation events involving XRP-backed assets on the Base network. Liquidators seized 4.18 million cbXRP to settle approximately 4 million USDC in debt between November 7 and November 13.
The liquidation mechanism triggers when the loan-to-value ratio exceeds the 62.5% threshold. This happens because falling collateral prices can push the loan above the permitted ratio. In this process, external agents pay off the debt in USDC and receive the collateral in cbXRP as compensation.
Despite recent liquidations, 53.53 million USDC remains outstanding in the analyzed market. Previous data points to a 10% drop in the asset price potentially putting another 8.84 million USDC at risk of liquidation.
Transaction records show no instances of bad debt during the monitored period. The collateral system successfully covered the amounts owed by borrowers thus far.
The movement of collateral in decentralized finance protocols can increase asset volatility and raise the risk of cascading liquidations for leveraged positions in the crypto market.
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