The frequency of stablecoin involvement in on-chain liquidation events appears to be increasing, driven by their growing role in DeFi and crypto markets. Stablecoins like USDT and USDC are critical for liquidity and trading, often used as collateral in protocols such as MakerDAO and Aave. Data from 2024 indicates stablecoins account for 63% of illicit transaction volume, suggesting their prominence in high-risk activities, including liquidations. Liquidation cascades, like those triggered by Terra’s UST collapse in 2022, highlight stablecoins’ systemic impact. Overcollateralized stablecoins, reliant on volatile crypto assets, face higher liquidation risks during market downturns, amplifying their involvement in such events.