IntoTheBlock: ‘High-risk’ crypto loans on Benqi surge to two-year high of $55 million

Odaily News According to data tracked by analytics firm IntoTheBlock, the total amount of high-risk loans (defined as loans within 5% of the liquidation price) on Benqi, a decentralized lending platform in the Avalanche ecosystem, rose to $55 million on Wednesday, reaching the highest level since June 2022. Cryptocurrency traders typically obtain loans from decentralized lending platforms by locking up collateral in the form of digital assets. The risk here is that if the value of the collateral falls too much, the protocol will liquidate the debt by selling the collateral. A loan within 5% of the liquidation price means that if the price of the collateral falls by 5%, it will no longer cover the loan, triggering liquidation. (Coindesk)