Woofun AI reports that MORPHO suffered $36.39 million in liquidations of PT reUSD positions after an anonymous wallet, identified by the prefix 0x854e, executed a volatile trade sequence in YT reUSD, .

Woofun AI data shows, The market disruption began when the address repeatedly accumulated YT reUSD, driving the expected annualized yield upward from an 11% baseline to approximately 20%. This rapid appreciation was short-lived; the wallet subsequently dumped its holdings, causing yields to collapse and destabilizing dependent positions.

Structurally, the crash targeted loop positions, a leveraged strategy where users borrow against collateral to redeposit funds, amplifying exposure. As yields plummeted, the value of PT reUSD—which represents the right to recover principal at maturity—fell below maintenance thresholds, triggering a cascade of liquidations across the protocol.

This incident underscores the fragility of permissionless lending markets where risk management is decentralized. With $36.4 million wiped out in minutes, the event serves as a stark warning about the volatility inherent in leveraged DeFi strategies.