The $4 billion ecosystem almost collapsed because of a $50 million loan

The $4 billion ecosystem almost collapsed because of a $50 million loan

The $4 billion ecosystem almost collapsed because of a $50 million loan
A crypto whale almost crashed the Fantom blockchain network with his loan.

Recently, the Fantom (FTM) investor community stirred up on forums and social networks by the news that a large "whale" of the platform was liquidated. Although the loan is only worth 50 million USD, a small number compared to the total locked assets of nearly 4 billion USD on the Fantom ecosystem, the "whale" locking the loan for interest and the transaction fee spiked causing the The network almost collapsed.

The great influence of whales

An account with the nickname “Roosh” invested 50 million USD worth of FTM (equivalent to 59 million FTM) as collateral on the DeFi (decentralized finance) platform Scream to borrow money. Roosh used the borrowed money to buy a large amount of Solidly (SOLID), Deus Finance (DEUS).

Scream is a highly scalable decentralized lending protocol on the Fantom platform. After depositing $50 million worth of FTM on Scream and borrowing DEUS and SOLID, this "whale" staked his assets for 4 years.

Fantom price plummeted since the first liquidation on April 29. Photo: CoinMarketCap.

The incident had a big impact on the market. The downtrend of Bitcoin and the cryptocurrency market in general has caused the value of FTM to drop. This resulted in part of Roosh's assets being liquidated to pay creditors.

The Scream platform liquidation of a large amount of FTM could seriously affect the Fantom ecosystem. Since Roosh locked his account, the DeFi platform had to sell off over 40 million FTM to cover the loss of Roosh's loan.

One of the members of Deus Finance loaned Roosh $2 million to help prevent this.

However, according to Blockchain analyst Amna, Scream's liquidation of 11 million FTM directly caused the FTM price to plummet from $0.85 to $0.79. Then the second and third liquidations occurred, dragging the price of FTM down to $0.76, or a 10.5% drop.

“From 59 million FTM in initial margin, after a total of 6 liquidations, Roosh is now only 18 million FTM,” said analyst Amna.

Even if FTM holders are unaware of the liquidations taking place, they will certainly be aware that the value of their assets is plunging.

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