Odaily Planet Daily reports that Andre Cronje, co-founder of Sonic, stated that during its first major market drawdown, the derivatives platform FT FlyingTulip experienced only about $50,000 in liquidations under its equity-based lending model. FT employs net risk calculation instead of a discounted collateral model, allowing its soft liquidation mechanism to function effectively, with an average liquidation amount per position ranging from $200 to $2,000. Andre Cronje noted that if a traditional loan-to-value (LTV)-based lending system had been used, the liquidation volume during this market volatility could have increased by 10 to 20 times.
Andre Cronje: FT's First Major Drawdown Triggers Only $50K in Liquidations
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Summary
Andre Cronje noted that the derivatives market experienced its first major drawdown on FT FlyingTulip, triggering approximately $50K in liquidations. The platform employs net risk calculation and a soft liquidation model, averaging $200 to $2,000 per event. Cronje observed that a traditional LTV system could have resulted in 10 to 20 times more liquidations. Altcoins to monitor may include those linked to platforms using similar risk models.
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