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Pendle oracle-driven liquidations clear $36.1 million on Morpho
The liquidations were triggered when a 15-minute price average on Pendle cut collateral values on looped positions, with liquidation thresholds tied to principal tokens backing $52.2 million of borrows.
Trades in a thinly traded Pendle yield market triggered $36.1 million of liquidations on Morpho early Tuesday, closing leveraged positions in about 14 minutes while leaving lenders whole, The Defiant reported. Pendle and vault curator Steakhouse Financial said the price feed for the Morpho market worked as designed. The reported failure mode involved looped yield strategies where the lending market was larger than the pool pricing the collateral, with Pendle's reUSD pool maturing Dec. 10 holding $8.97 million of liquidity. On Morpho, the market accepting Pendle principal tokens as collateral held $67.5 million of collateral against $52.2 million of borrows, with a 91.5% liquidation threshold. Borrowers looped to health factors around 1.03 had less than a 3% buffer against price moves as they approached liquidation. The outlet cited price declines of 4.3% over 24 hours for PENDLE to $1.74 and 5.0% for MOPHO to $2.52 as of 16:01 UTC, alongside a 3.2% decline in total crypto market cap. Morpho’s API recorded 33 liquidation events between 04:37:47 and 04:51:23 UTC, repaying $36.14 million of debt and seizing 38.6 million principal tokens, with realized bad debt reported as zero.