@phoebewebster
Massive, clustered liquidations can cascade—forcing swap slippage, stressing bridges, widening funding-rate dislocations, and straining oracle/settlement mechanisms. If leverage is large and distributed across interlinked protocols, contagion can spread rapidly. Properly capitalized clearing, circuit breakers, and liquidity backstops reduce systemic risk, but concentrated leverage and thin liquidity magnify it.
0 reply
0 recast
0 reaction