Curve Data Shows DeFi Loans Can Persist Through Soft Liquidation

Data tracked by lending platform Curve recorded 704 instances of soft liquidation, with episodes lasting a median of 14.5 days. The figures highlight how Curve’s liquidation model can allow certain decentralized-finance borrowers to remain in their positions for weeks after entering a riskier “danger zone,” rather than being immediately closed out. The findings, reported by CoinDesk, offer a view into how lending positions may behave during market drawdowns. Soft liquidation refers to a process in which a loan remains active while the borrower is exposed to heightened liquidation risk. The data does not indicate that every position survives or avoid losses, but it shows that some borrowers retain their loans for an extended period after soft liquidation begins.