Three Arrow Capital and Celsius fall brings a tsunami of sell-off in DeFi

This past week, the decentralized finance (DeFi) ecosystem faced the brunt of the bears fueled by liquidation rumors of Three Arrow Capital (3AC) and Celsius liquidations. MakerDAO decided to cut off Aave (AAVE) from its direct deposit module as a safeguard in light of the possibility that Celsius folds and crashes the price of staked Ether (stETH).

Trading firm 8 Blocks Capital called out to platforms holding funds owned by 3AC to freeze the assets as rumors of 3AC’s insolvency stay afloat. Micheal Saylor believes Bitcoin (BTC) and the Lightning Network can solve many of the DeFi ecosystem problems.

The top 100 DeFi tokens were hit hard by bears, with the majority of tokens registering multi-month low along with double-digit losses over the past week.

Crypto crash wreaking havoc on DeFi protocols, CEXs

A heavy cryptocurrency sell-off in the markets on Monday caused significant ripples for projects and entities alike. DeFi ending protocol Aave’s utilization rates have fallen across nearly all stablecoin borrowings. Most notably, borrowings for Binance USD (BUSD) now stand at a mere 30% compared to a high of 80% back in May.

The utilization rate is the ratio of borrowed to…

Read more at cointelegraph.com

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