89% of Ethereum Lending Liquidations Completed via Atomic Paths, RWA May Shift to Off-Chain Settlements

Analytical firm Sentora recently released a report indicating that approximately $1.63 billion in liquidations on Ethereum lending platforms over the past year were completed through atomic paths, accounting for 89% of the total. An atomic path refers to the liquidation of collateral and debt repayment completed within a single on-chain transaction, commonly executed through methods such as flash loans, self-funding advances, or direct contract calls. Due to thin liquidity pools and whitelist transfer restrictions on RWA collateral, liquidations are increasingly shifting towards off-chain market makers, RFQs, and solver paths. Compared to atomic liquidations that rely on DEX liquidity, RWA often struggles to clear instantly on DEXs, leading to liquidations being handled by compliant off-chain market makers who execute trades through price inquiries and take over collateral before completing the liquidation.

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