The Ethereum lending market experienced its worst liquidation event in 12 months in February, with nearly $500 million of collateral liquidated. This was the second highest monthly liquidation amount in DeFi's history, behind only the May 2021 market crash, when it reached $670 billion. Unsurprisingly, the surge in liquidations coincided with declines across the market, causing a significant drop in the total cryptocurrency market cap, triggering a lot of forced position squaring. Most of these liquidations took place on the two largest lending platforms, Aave and Compound, which handled the bulk of February's settlement volume. The platform's clearing mechanism allows third-party liquidators to repay a portion of insolvent loans and obtain borrowers' collateral at a discount, typically between 5% and 15%, depending on the asset, providing an efficient incentive for the market to adjust.