IntoTheBlock: "High-risk" encryption loans on Benqi have surged to the highest level in two years, reaching $55 million.

According to the data tracked by analysis company IntoTheBlock, the total amount of high-risk loans (defined as loans within 5% of the liquidation price) rose to 55 million US dollars on Wednesday, reaching the highest level since June 2022. Cryptocurrency traders typically obtain loans from Decentralization lending platforms by locking Collateral in the form of digital assets. The risk here is that if the value of the Collateral falls too much, the protocol will liquidate the debt by selling the Collateral. A loan within 5% of the liquidation price means that if the price of the Collateral falls by 5%, it will no longer cover the loan, triggering liquidation.