Summary
TLDR: A sudden change in loan-to-value ratio on the DeFi platform Pac Finance led to $26.8 million in liquidations, impacting users. Lack of transparency and communication in protocol changes highlight risks in DeFi investments. Pac Finance is working on a plan with affected users to address the issue and prevent future incidents.
Key Points
1. A dramatic turn of events on the decentralized finance (DeFi) platform Pac Finance led to a $26.8 million liquidation event, heavily impacting numerous users.
2. The financial upheaval occurred unexpectedly on April 11 and has since stirred substantial debate within the cryptocurrency community.
3. Operating on the Blast network, Pac Finance allows cryptocurrency enthusiasts to deposit their funds to earn interest by lending, securing loans by ensuring borrowers receive only up to a specified percentage of their collateral known as the “loan-to-value ratio” (LTV).