Nasdaq-listed BTCS, which holds Ethereum as a core asset, sold part of its Ethereum holdings below acquisition cost to prevent collateral liquidation on the decentralized finance (DeFi) lending platform Aave (AAVE). According to BTCS’s quarterly report released Nov. 13 and reporting by CoinDesk, the company owed Aave about $64.1 million (~86 billion won), including interest, as of Nov. 9. The collateral backing that debt was 46,676 ETH, worth about $99.3 million (~130 billion won) at the $2,127 Ethereum price cited by the company. The collateral ratio is about 155% of the debt.
The problem is that if Ethereum falls further, Aave’s protocol could automatically sell the collateral to recover the borrowed funds — a “forced liquidation.”…