Wire · market
A $320,000 Trade on Pendle Triggered $36 Million in Morpho Liquidations
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Fusion42 · 27 August 2026 · Fusion42 review
A trader executed a series of quick trades on Pendle that pushed the yield on the PT-reUSD market past 20%, triggering $36 million in automatic liquidations on Morpho due to high loan-to-value ratios among borrowers using loop trades. The incident exploited the design of the oracle and borrower risk management rather than any protocol bug or hack.
This Wire brief sits within Fusion42's coverage of Crypto & Web3 and Fintech.
◆ ◆ The Wire takeaway
This event shows you that DeFi borrowers running loop trades face sudden liquidation risks even without protocol bugs. Protect your lending products by rethinking risk limits and oracle designs before another trader exploits price moves like this.
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1 source · 27 Aug 2026
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