Pendle Price Glitch Triggers $36 Million Liquidation Event

A sharp price drop in a thinly traded Pendle yield market caused a wave of liquidations early Tuesday. The event wiped out $36.1 million in leveraged positions on the Morpho protocol in just 14 minutes. Despite the large total, lenders on the platform remained protected and were not impacted by the volatility.

Representatives from both Pendle and Steakhouse Financial stated the price oracle functioned exactly as intended during the trade. The liquidations occurred because the automated systems reacted to the specific price movement recorded in that isolated pool.

This incident highlights the risks associated with yield markets that see lower trading volume. Traders should watch for how platforms adjust their risk parameters for these assets in the coming weeks to prevent similar mass liquidations.