Lookonchain, a prominent on-chain analytics firm, recently highlighted a shocking event of huge $ETH liquidation. Lookonchain’s latest X post has revealed that someone has been liquidated of a large amount of up to 1,688 $ETH tokens just recently. The respective amount accounts for up to $5.6M in terms of value. The event took place just a few hours ago after the sudden price dump of Ethereum. ETH briefly dived below $3,000 but recovered soon now trading at $3,030.

A Compound User Gets Liquidated of Nearly 1,688 Ethereum for Debt Repayment

On its official X account, Lookonchain disclosed that this episode raises significant concerns regarding the respective individual. The person still has an enormous debt of almost $13.9M on Compound. The health rate of the respective individual reportedly stands at only 1.07%. This signifies that the collateral thereof is hardly covering the loan. As a result of this, the person is facing an extremely vulnerable situation in the case of further liquidations.

The Current Health Rate of the Individual Poses Risk of Further Liquidation

Compound operates as a decentralized lending platform that permits consumers to borrow crypto assets like USDC, DAI, and ETH. Nonetheless, when the collateral’s value drops below a particular threshold, it liquidates the position automatically. In this way, it guarantees the repayment of the loan. In the current situation, the liquidated person’s health rate (1.07%) highlights that the collateral is a little above the least required to circumvent liquidation.

In the case of such a low rate, even a slight price turn could ignite another liquidation. This could pose a substantial risk to the remaining assets of the individual. While pointing toward this event, Lookonchain also shared screenshots providing the details about the individual’s wallet.