A roughly 3% move triggers $36.4 million in Ethereum DeFi liquidations

Morpho recorded about $36.4 million in liquidations after a roughly 3% price move early Tuesday. One wallet's trade in a related market moved the value of the collateral used by borrowers. The liquidated borrowers had built strategies that could not withstand a move of that size. The collateral was PT-reUSD, a token issued on Pendle and tied to reUSD. ReUSD is a dollar-denominated asset that pays interest to holders. Pendle lets holders split an interest-paying asset into a principal token and a yield token. The principal token is a claim on the original money. It can be redeemed for one dollar at a set date, which is Dec. 10 in this case. The yield token collects the interest earned between now and then. The two tokens derive their value from the same underlying asset. Their prices must add up to the value of that asset. Buyers who accumulate the yield token effectively bid up the interest. The principal token then becomes cheaper to compensate. Pendle said its price feed worked as designed. Steakhouse Financial reported that lenders suffered no losses. Steakhouse Financial reported that no bad debt was created. Steakhouse Financial reported that the underlying reUSD asset was unaffected.