3% Token Move Wipes $36M from DeFi Lending Platform

A small price move of about 3% on the Pendle token PT-reUSD triggered $36.4 million in liquidations on the lending platform Morpho, according to a report.

The issue was caused by traders who had built strategies that couldn't survive such a small price drop.

PT-reUSD is tied to reUSD, a dollar-denominated asset that pays interest, and Pendle allows holders to split the asset into two separate tokens: PT and YT. The prices of these tokens are inversely related.

A wallet bought a large amount of YT-reUSD, driving up its price and pushing down PT-reUSD by 3%, which was enough to trigger liquidations on Morpho for borrowers who had deposited PT-reUSD as collateral.