Curve Founder Faces Massive Blow As CRV Price Dives 40%, Multi-Million Dollar Liquidations
June 13 2024 - 5:00PM
NEWSBTC
A sudden and dramatic crash in the value of Curve Finance’s native
token, CRV, has resulted in substantial losses for bullish
investors and the platform’s founder, Michael Egorov. Blockchain
analysis platform Arkham reported that Egorov faced liquidations
totaling $140 million in CRV. Curve Finance Founder Egorov
Liquidated In a social media post on X (formerly Twitter), Arkham
confirmed that Egorov’s lending position worth nine figures was
liquidated across five protocols due to the price of CRV dropping
below his liquidation threshold. Related Reading: Solana
On-Chain Indicators Suggests A Return Of Bullish Sentiment, Is It
Time To Buy SOL? Egorov’s accounts incurred over a million dollars
of bad debt on Curve’s Llamalend, which he managed to clear by
receiving $6 million USDT. Additionally, Egorov experienced a $5
million liquidation on UwU Lend while making repayments on Inverse
to mitigate further losses. On June 13, Curve contributor Saint Rat
revealed that the protocol had incurred $11.5 million in bad debt,
which could be resolved if the price of CRV rises to $0.33. Egorov
expressed his commitment to working with the Curve Finance team to
address the bad debt situation and protect users from its impact.
Proposal To Burn 10% Of CRV Tokens In response to the crisis,
Egorov proposed burning 10% of the total CRV supply to stabilize
the token’s price. He also announced that active voters would
receive a three-month boost on deposit rewards across all Curve
platforms, aiming to incentivize participation and strengthen the
ecosystem. Egorov also stated: The Curve Finance team and I have
been working to solve the liquidation risk issue which happened
today. Many of you are aware that I had all my loans liquidated.
Size of my positions was too large for markets to handle and caused
10M of bad debt. Only CRV market on lend.curve.fi (where the
position was the biggest) was affected. I have already repaid 93%,
and I intend to repay the rest very shortly. It will help users not
to suffer from this situation. Related Reading: Toncoin (TON) Set
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Interestingly, this recent episode is not the first time Egorov has
faced significant liquidations. Last year, he borrowed $60 million
worth of loans from Aave, which posed a risk of bad debt in the
event of liquidation. To address this, Gauntlet, a risk
management firm, recommended freezing Aave’s v2 CRV market to
minimize protocol risks. In a subsequent private deal, Egorov sold
106 million CRV for $46 million to repay most of his debts on Aave
and other lending platforms, ultimately settling his debt to Aave
with an $11 million USDT deposit in September. Before the market
crash, CRV was trading at $0.3582. However, it plummeted nearly
40%, hitting an all-time low of $0.2220. Since then, the
token has recovered and is currently trading at $0.2880. This
recovery has helped to mitigate the losses incurred within the
24-hour timeframe, reducing them to 22%. Featured image from
DALL-E, chart from TradingView.com
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