A liquidation sequence on Morpho’s USDC and USDT markets concluded after repaying $36.14 million in debt. The event began early on August 25, 2026, and resolved completely within approximately fourteen minutes.
The protocol recorded zero bad debt during the process. Data indicates that the Pendle reUSD pool held $8.97 million in liquidity, which was significantly smaller than the $52.2 million borrow size on Morpho at the time.
Key facts
- The liquidation sequence started at 04:37:47 UTC on August 25, 2026
- The process ended at 04:51:23 UTC on the same day
- A total of $36.14 million in debt was repaid
- No bad debt was realized by the protocol
- Pendle reUSD pool liquidity stood at $8.97 million
- Morpho borrow size was $52.2 million
Why it matters
This event highlights the dynamics between liquidity depth and borrow sizes in decentralized finance lending markets. The successful resolution without bad debt demonstrates how liquidation mechanisms can function effectively even when external pool liquidity is substantially lower than the outstanding borrowed amounts.