The crypto market suffered a powerful crash on Thursday morn UTC, which sent prices of major currencies such as Bitcoin (BTC) and Ether (ETH) tumbling in backlog of 10%.

When traders blitz for the exits, the price of stablecoins generally increase as the need for stability rises. In today'southward crash, withal, the effect became especially pronounced on Dai, which briefly traded for $1.iii between 7 am and 8 am UTC.

Dai/USD price on Coinbase, courtesy of TradingView

Most notably, Dai traded at this inflated valuation simply on Coinbase and Uniswap, while other exchanges including Kraken and Bitfinex seem to have maintained a relatively stable toll.

Dai/USD price on Bitfinex, courtesy of TradingView

Coinbase and Uniswap are the two exchanges used by Compound's Open up Price Feed oracle. The former acts equally the baseline, while the latter is used as a sanity check and anchor. Withal, it appears that Uniswap failed in its function and also posted a much higher price than normal.

Compound's liquidation this morning time amounted to $89 million, of which about $52 million came from Dai, co-ordinate to data from DuneAnalytics.

One liquidation in detail is notable for its extremely big size of 46 one thousand thousand Dai repaid.

Every bit DeFi researcher Sam Priestley explained, this liquidation was performed on a leveraged COMP farmer, who used USD Coin (USDC) and Dai collateral to power recursive borrowing in the aforementioned currencies. The apparent increment in Dai's price put the account below the liquidation threshold.

The liquidator seized most 2.4 billion cDai, worth approximately $50 million with a price of $0.0209, while returning just $46 million in Dai. This is expected beliefs given Compound's electric current liquidation incentive of viii%.

The transaction in question involved the apply of a wink swap from Uniswap and calls to update Chemical compound's oracle. Another 4 transactions issued by the same liquidator removed an additional $half dozen 1000000 in debt.

The event highlighted the dangers of relying on just a few data points for oracles, Chainlink (LINK) founder Sergey Nazarov told Cointelegraph: "We predicted this very exploit of centralized oracles and poor data quality over a year ago," mentioning his explanation of the risks of using a single substitution. He continued:

"DeFi protocols that rely on centralized oracles that pull data from single exchanges, DEXes or otherwise, are inadvertently putting user funds at adventure. [...] The Chainlink network was unaffected by this exploit because we source data from multiple leading data providers and hundreds of exchanges, making sure we capture the real-earth price of a cryptocurrency through proper market coverage."

While at that place is no evidence to suggest agile manipulation, the fact that Dai's cost jumped specifically on the exchanges used by Compound's oracles could draw suspicion. In general, the liquidation adds to the recent flash loan hacks to highlight DeFi's excessive reliance on just a few data sources as oracles, Nazarov concluded.