The DeFi segment, including decentralized exchanges with perpetual contracts, went through the volatility of October 10–11 without major losses. On the contrary, liquidations helped protocols earn from fees, and they successfully managed the risks.
Over two days, the market experienced liquidations totaling $19 billion. But this time, decentralized platforms showed resilience. There were liquidations, but not critical ones, especially compared to 2022.
One reason is more reliable collateral. Many protocols now use tokenized government bonds and stablecoins with good liquidity.
In the ETH segment, the situation is stable: liquidations are only possible if the price drops to $1,548. In this case, positions totaling less than $1 billion would be at risk — indicating a low level of risk.
Trust in perpetual exchanges was shaken, but volumes and open interest began to recover
Decentralized exchanges with perpetual contracts suffered the most from liquidations — they lost more than 50% of open interest. Before the crash, total OI across all platforms exceeded $25.7 billion, but after the drop it fell to $13.7 billion.
TVL on perpetual DEXs started to grow, rising from $13 to $17 billion. Source: DeFiLlama
Despite the rebound, mass liquidations seriously undermined traders’ trust. Many lost their positions completely, causing a wave of discontent in the community. However, after a few days, open interest began to recover and reached $17 billion. Of this, $8.24 billion was held by Hyperliquid, according to DeFiLlama data.
Hyperliquid itself stated that the decline was delayed — activity dropped from $15 to $6.24 billion. At the same time, daily trading volume on perpetual exchanges still exceeds $33 billion, and total activity for the week from October 6 to 12 amounted to $264 billion — an all-time high.
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The crash occurred during intense competition among platforms. Old and new protocols were fighting for users, and at that moment volatility hit retail traders especially hard. Many used leverage and couldn’t hold on — liquidations were severe.
Tokens of leading platforms also dropped. Weekly losses ranged from 16% to 45%. The HYPE token, for example, fell to $38.71. Now the sector is trying to restore not only liquidity and open positions, but also its own capitalization.
DEX and lending protocols profited from the surge in fees
During the week from October 6 to 12, activity on decentralized exchanges hit a record — over $177 billion in turnover. This surge fits well into the overall trend of DEX sector growth.
Uniswap and PancakeSwap still hold the lead, with no signs of pressure on them. The surge in activity coincided with a new wave of memecoin trading, especially in the Binance ecosystem.
See also: Centralized exchanges suspected of underreporting the scale of liquidations
Lending protocols felt more pressure — due to their structure. The total value locked remained above $83 billion, with Aave remaining the leader. However, borrowing volumes fell below $50 billion for the first time since August, as users tried not to open new positions amid volatility.
In the short term, Lido‘s yield on stETH staking jumped to 7.05% per annum, but then returned to its usual level. Overall, the DeFi lending sector has become more restrained. The high yields typical of past crashes have now given way to a more conservative model — with lower liquidation risks.
