Research firm Sentora said roughly $1.63 billion in liquidations on Ethereum lending platforms over the past year were processed largely through atomic paths, with 89% of the total settled that way. The firm said atomic liquidations depend on decentralized exchange liquidity and are typically completed within a single on-chain transaction, where collateral is sold and debt is repaid in one sequence. Common methods include flash loans, prefunded capital, or direct contract calls. Sentora also said the picture changes for real-world asset, or RWA, collateral. When liquidity pools are thin and transfers are subject to whitelist restrictions, that collateral is harder to unwind instantly on DEXs. In those cases, liquidation flow is likely to move more toward off-chain market makers, request-for-quote, or RFQ, systems, and solver-based routes, where compliant buyers can take the collateral before the position is closed.
According to ChainCatcher, research firm Sentora said about $1.63 billion in liquidations on Ethereum lending platforms over the past year included 89% that were settled through atomic paths.
Sentora said atomic liquidations rely on DEX liquidity. For RWA collateral with thin liquidity pools and whitelist-based transfer restrictions, liquidation activity is expected to shift more toward off-chain market makers, RFQ routes, and solver-based execution.
How atomic paths work in liquidations
An atomic path means the liquidation completes collateral disposal and debt repayment within the same on-chain transaction. Common approaches include flash loans, prefunded capital, or direct contract calls.
Why RWA collateral follows a different route
By contrast, RWA collateral is often difficult to sell immediately on a DEX. Sentora said these liquidations are more likely to be handled by compliant off-chain market makers through RFQ execution, with solvers taking on the collateral before the position is closed.
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