Justin Sun, the founder of TRON, has drawn the attention of the crypto community to a major issue in the Ethereum network, considering it a threat to Ethereum’s future. He believes that excessive leverage in Ethereum transactions on centralized and decentralized platforms can lead to serious problems. Sun has warned on Twitter that this issue may cause an explosion in the short term, resulting in significant losses for DeFi protocols and projects on the Ethereum network. He has urged the Ethereum team to address this issue early on to prevent harm to DeFi users. Recently, in derivative markets such as perpetual options and futures, the use of high leverage for Ethereum transactions has become common. Many traders are using leverage up to 50 or even 100 times, increasing the risk of liquidation in price fluctuations. Additionally, Ethereum is used as collateral in DeFi protocols, leading to sudden price drops in Ethereum triggering widespread liquidations and downward pressure on the market. Sun, highlighting the risks of high leverage, has pointed out that this could lead to an increase in funding rates and consequently, an increase in short positions, potentially causing market corrections. Some analysts have provided data showing that currently, traders with 5 to 10 times leverage are operating on a $50 billion market capitalization in the Ethereum market. This figure accounts for approximately 11 to 14% of the total Ethereum market value ($440 billion). This issue can be dangerous as daily liquidation volumes have reached $50 to $70 million, indicating that many traders are dealing with high-risk transactions. On the page of the real-time digital currency prices, you can view the prices of all tokens and cryptocurrencies live and in real-time.
