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Lista DAO Executes $3.5M Flash Loan Liquidation Amid Liquidity Crisis

Lista DAO Executes $3.5M Flash Loan Liquidation Amid Liquidity Crisis

Author:

Global Cryptocurrency

Published:

2025-11-07 13:12:03

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BTCCSquare news:

Lista DAO deployed emergency measures to liquidate a $3.5M flash loan after its USDX lending vault neared collapse due to severe liquidity strain. The decision was ratified through a rapid one-hour community vote, underscoring the protocol's decentralized crisis response.

Utilization rates across interconnected vaults spiked to 99%, exposing fragility in DeFi lending markets under heavy borrowing pressure. Re7 Labs, overseeing the vault, facilitated the liquidation to mitigate systemic risk.

While $3.5M was recovered with penalty fees, residual debt of $2.09M was shifted to a public liquidation pool. The event highlights how quickly algorithmic stablecoin mechanisms can destabilize when collateral buffers evaporate.

By:

DeFi Liquidations Expose Persistent Market Misconceptions

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