Source: Lightning HSL

Before, I think the possibility of this article being written is very high. If you have to set a number, I think the 95% probability is wrong. But the world is diverse, and the possibility of 5% is still worth assuming.

In recent days, two loan vaults on MakerDao have frequently appeared on X, both of which have mortgaged more than 60,000 ETH and each have borrowed more than 60 million Dai. The security factor is both struggling on the edge of 1.0. These two guys are very stupid, with a safety factor of 1.02, and they don’t have to cut positions to save their lives. If this is liquidated, 130,000 ETH will be more than 200 million US dollars in market spending.

Everyone wants to see these two big fireworks explode.

I have observed for a few days and felt that these two addresses, at least this 0x6bb8bc41e668b7c8ef3850486c9455b5c86830b3, has adjusted their positions very actively, and may be playing a thrilling arbitrage.

I may also think too much. If I am wrong, I will just think it is a hypothetical financial game for everyone.

Since DeFi became popular, because the assets on the chain are transparent, opening huge leverage on the chain has become a popular game for everyone. There is a group psychological effect in the currency circle, which is that it tends to explode the huge leverage positions on the chain, commonly known as watching big fireworks.

The most classic is the short-selling incident of link selling in August 2020. An institution named Zeus Capital released a 59-page short-selling report on ChainLink in July 2020, claiming that the intrinsic value of Link is only US$0.07, while the price of link was around US$8 at that time. Then in August, the institution used a total of USDC of 22 million and sold it through Link.

As a result, the entire currency circle forced the link from $8 to $13, exploding this huge leverage.

Another famous case is that the Curve boss's mortgage loan of more than US$140 million in mid-2023 was liquidated. It was also because the entire network saw such a large amount of leverage, which forced the Crv coins to the liquidation price of US$0.4, and exploded Curve.

The 50-fold leverage brother at Hyperliquid in the past two weeks is also a popular fireworks.

Another non-currency case is the story of Gamestop fighting Wall Street institutions in January 2021. It is also the stocks that retail investors have joined forces to raise institutions to short selling, and they have forced the institutions to explode.

This type of retail investors (more likely to have anonymous investors in the class) conspires to buy or sell in the opposite direction of huge leverage on the chain without communication, which seems particularly popular in the currency circle, which is a phenomenon of group emergence.

On MaThe liquidation price will be released one hour in advance for kerDao to mortgage ETH. This is different from aave that calculates the clearing price by block.

The picture below is the latest ETH released by Makerdao, which was just found, when the collateral is liquidated 1795.8 in the next hour, while the real-time price of ETH at that time was 1811.45.

If this mortgage loan is aave, the loan with a liquidation price of 1795.8 should have been liquidated, but it has not been liquidated yet, but will have to wait an hour before it will be executed.

This one hour provides a buffer time for MakerDao lenders. They can actively reduce positions before the liquidation price is updated to increase the liquidation price of their own vault to above 1795.8, which can avoid being liquidated.

Okay, the above are two prerequisite information. Let’s summarize:

1. There is a group psychological effect in the currency circle. Retail investors (anonymous large investors) like to conspire to break up (smash) the huge leveraged positions on the chain;

2.MakerDao’s liquidation price is delayed by one hour, and the real-time liquidation price is actually the price of ETH the previous hour.

(Again, I think the following guess is 95% possible, so please criticize and correct me and act harder. This article was also written a few days ago, but I think it is unreliable and has not been posted.)

These two MakerDao's 60,000 brothers may be using the above two characteristics to complete huge capital entry, or playing a thrilling arbitrage.

Suppose Brother 60,000 has prepared huge funds and wants to invest now that everyone scolds him for breaking the ether, but the 60,000 yuan fund is too large, and it may directly hit the market slippage of more than 10%, and his expected price is below 1,800 yuan.

How large is the amount of funds?

Think about Micro Strategy, Micro Strategy spent more than 35 billion US dollars, with an average position building cost of 6.7w/btc. A total of 52w Bitcoin was bought, and the market value of Bitcoin was about 2 trillion US dollars. The proportion of micro-strategy holding coins reached single digits (2.5% in the total amount of 2100w. Considering that more than 3 million coins were lost in the early stage, the total amount of 18 million was about 2.9%.

Micro Strategy first bought 21,400 Bitcoins in August 2020 for US$250 million, and the cost of building a position was more than US$11,000. As of April 2025, this guy has built a position of 520,000 coins, and the cost price has reached 6.7 million.

Correspondingly, if Brother 6w wants to build a position, the funds that reach the single digit of Ethereum's market value, such as 2% = US$2.5 billion, if you want to control the cost of building a position, you can't be as high-profile as Brother Micro Strategy.

6w Brother, he took advantage of the group effect of leverage in the currency circle to create a large bull market with high profileLeverage of 6w ether (US$100 million) stimulates users in the currency circle to smash the market, while Brother 6w is closing at a low price.

At the same time, in order to avoid the 6w ether being liquidated, Brother 6w needs to be prepared at any time to reduce the leverage at any time to avoid liquidation. Until all positions are built.

In fact, thinking about the big fireworks at Chainlink four years ago and the super big liquidation of nearly $200 million by the Crv boss may be a kind of currency selling behavior.

It's possible (the probability is less than 5%) Link's this time, there are super big players who want to sell links. In order to avoid large-scale market crashes, they opened a short leverage of US$20 million to stimulate the currency circle to conspire to pull the market and blew his butt, and then he took the opportunity to ship near the liquidated price. This kind of liquidation cost that costs millions and ships hundreds of millions of tokens is too cost-effective.

This time, the Crv boss simply wanted to spend the huge amount of coins in his hand. If he really threw them into the market, he might have to go directly to zero, and he would not spend much money. However, by establishing long leverage and mortgageing Crv to lend U, he can cash out. As for collateral, let the market explode.

Another lower possibility is whether these two 60,000 brothers in MakerDao are likely to play the following arbitrage logic:

1.6w brother mortgaged huge ETH in MakerDao and opened huge leverage to borrow Dai, triggering the shorting of the ETH effect of the retail investors in the industry.

2.6w brother will buy ETH below the liquidation price of his MakerDao vault (1800), such as 1750.

3. If your position will be liquidated after the MakerDao liquidation price is updated, then Brother 6w will repay part of the debt in advance to avoid being liquidated, or increase the ETH bought in the above two areas, increase the amount of collateral, and thus increase the liquidation.

4. If the real-time price rises to higher than 1800 before MakerDao updates the liquidation price, that is, the ETH bought by Brother 6w in step 2 is profitable, Brother 6w can sell the ETH, such as selling it at 1850 to make a profit.

It just goes back and forth until the price completely falls below, and Brother 6w bought all the principal into ether, thus completing a huge amount of funds under 1800 to build a position; or it keeps rising until there is no ether to sell it, so that the arbitrage is successful, the arbitrage ends and leaves, and then wait for the next 1800 opportunity.

Finance experts and mathematics experts are welcome to correct me.

In fact, it has always been a difficult time for super large funds to enter the currency circle. The difficulty in depositing is a threshold, and the other threshold is that the total pool is too small. Ten years ago, if you want to buy Bitcoin in large quantities, you will choose to buy mining machines and mine.