Defi Crashes Eth

ethereum crashes sep 5 2020

Eth is down from about $480 to now $350 in just days with it falling today significantly more than bitcoin. That suggests there’s something specific to eth, meaning defi is the cause and in particular it may well be sushi. How? Well, due to the liquidity balancing on Uniswap, while sushi’s price was increasing bots were converting sushis into eth. Now that sushi’s price is falling, bots are doing the opposite. They are selling eth and buying sushis. Let’s say for example 20 sushis at $5 each are worth 0.2 eth and that 0.2 eth is worth $100. If you put down on the Uniswap pool 0.2 eth and 20 sushis, you’re basically telling the world you’re willing to sell 20 sushis at $5 each or 0.2 eth for $100. So sushi’s price now goes to $10 while eth’s price doesn’t move. If you don’t balance it yourself by swapping…

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