According to ME News, on June 6 (UTC+8), Sonic co-founder Andre Cronje stated that during FT (FlyingTulip)'s first major market drawdown, the liquidation volume under the equity account lending model amounted to only approximately $50,000. Due to the use of net risk calculation instead of discounted collateral models, combined with the soft liquidation mechanism, the average liquidation amount per position was only $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 ten to twentyfold. He added that the equity account model enables net risk management and reduces market impact through its soft liquidation mechanism, resulting in a safer, less volatile, and lower-discount lending experience. (Source: BlockBeats)
Sonic Co-Founder: FT's Risk-Adjusted Model Reduces Liquidations During Market Downturns
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Summary
Sonic co-founder Andre Cronje said that market volatility during FlyingTulip’s first major drawdown triggered only about $50,000 in liquidations. The platform’s equity account-based model, which uses net risk and soft liquidation, kept average losses between $200 and $2,000. Cronje noted that a traditional LTV model could have caused 10 to 20 times more damage. The design reflects a shift in market trends toward more resilient structures.
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