Maple Protocol Avoids Liquidations During Crypto Crash

No Liquidations, No Bad Debt

Decentralized credit protocol Maple confirmed that none of its users’ positions were liquidated during the sharp market drop on Feb. 2. This means no bad debt* was recorded on the platform.

Users deposited $10 million to strengthen their positions and prevent liquidation.
Over $10 billion in liquidations occurred across the crypto market as Ethereum (ETH) briefly dropped to the low $2,000 range.
Major cryptocurrencies saw price declines between 10% and 30%.

How Maple’s Lending Pools Handled the Volatility

Maple operates as a decentralized credit protocol where users deposit assets into lending pools for institutional borrowers.*

Total Loans Managed: $2.5 billion as of Feb. 7 (rwa.xyz data).
Blue Chip & High Yield Secured Lending: Both remained overcollateralized* despite the market crash.
High Yield Secured Pool: Saw $2 million in new deposits during the sell-off.
Syrup Pool: A mix of strategies for higher yields, issued margin calls on 35% of loans, leading to $5 million in new deposits.

Borrowers Strengthened Collateral

To maintain stability, borrowers took action during the market turbulence:

Added $7.4 million in new collateral.
Repaid $7.4 million in loans, further strengthening Maple’s loan book.
Collateralization levels averaged 165% across all pools as of Feb. 6.

Aave Successfully Processes $210M in Liquidations

Lending platform Aave also performed well during the Feb. 2 market drop, handling liquidations efficiently.

Liquidations Processed: $210 million (Chaos Labs data).
Zero Additional Bad Debt: Positions were settled without causing extra losses.
Ethereum Network: Most liquidations took place on the Ethereum main instance, reducing protocol-wide risks.
Impact on Bad Debt: Aave’s existing bad debt actually decreased by 2.7% as debt asset values dropped.

DeFi Yield Options Adjusted

Maple’s report also noted that some decentralized finance (DeFi) protocols pulled back on yield options during the volatility. However, their vaults still delivered double-digit annual returns.