FTM cascading liquidations..any other chain at similar risk?

FTM is going through a runaway price collapse due to cascading liquidations.One overleveraged individual with 50M is able to bring down the price by 30% in a day for a $2 billion chain. I’m wondering what other chain could face similar risk and can anything be done to discouraged leverage on huge sums?

Larger question: Is Defi, which was supposed to give the small guy access to financial system just turning into a playground for whales to place bets?

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9 thoughts on “FTM cascading liquidations..any other chain at similar risk?”

  1. > any other chain at similar risk?

    Every chain is at risk for liquidations when the market is tanking. FTM tanking will mainly impact FTM due to how it’s not a major asset on any other chain.

    > One overleveraged individual with 50M is able to **bring down the price by 30% in a day**

    This hasn’t actually happened.

    > Is Defi, which was supposed to give the small guy access to financial system just turning into a playground for whales to place bets?

    Both. The small guy does have access to the defi financial system. Due to the It’s open and permissionless nature of it, it’s a playground for everyone who want to play, rich or poor.

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  2. Wouldn’t really treat the FTM disaster as a reference point for all chains, Cronje’s and Daniel Testas involvement pretty much signalled to me the whole thing was a rug waiting to happen.

    Was there ever anything innovative about FTM apart from being a land of ponzies?

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  3. Every chain is at similar risk.

    Take the biggest one ethereum for example, try swap 50m in uniswap. The slippage of this transaction will be about 33%.

    So even if you collaterize at 50%, the cascade liquidation will get you eventually.

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  4. >Larger question: Is Defi, which was supposed to give the small guy access to financial system just turning into a playground for whales to place bets?

    Yes. It’s the inevitable, obvious consequence of a fully unregulated ecosystem populated by low-information investors. Highly capitalized wolves are here for the slaughter, with zero fear of consequences for their actions.

    It really all goes back to one of the many, many great lines in *Line Goes Up*: the problem with our global financial system is a human one–it’s about what people do to other people, *not* that the buildings they do it in might have the word “bank” on the outside.

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