DeFi Token CRV Loses 30% Value With Curve Finance Founder Liquidated

[Coinx]

DeFi Token CRV Loses 30% Value With Curve Finance Founder Liquidated


Michael Egorov, founder of stablecoin lending and borrowing protocol Curve Finance, sees his position being liquidated.

It had more than 111 million CRV tokens as collateral and $20 million in debt across four DeFi platforms, Lookonchain reported on June 13.

As the price of CRV fell, other positions were flooded, resulting in a series of liquidations.

#Eğrifi Its founder (Michale Egorov) is being liquidated!

It currently has 111.87 million $CRV($33.87 million) collateral and $20.6 million debt on 4 platforms. pic.twitter.com/huwgetBXuS

— Lookonchain (@lookonchain) June 13, 2024

Curve Finance Problems


CRV prices have tumbled over the past week, falling 45% since June 7. This has put pressure on those who use the token as collateral for DeFi loans, such as the platform’s founder.

Following the $20 million hack of the UwU lending protocol earlier this week, further pressure has been placed on the platform and token prices.

In response to the incident, Egorov said that ‘soft purges’ were working. “The system performed wonderfully,” he said. “This gave the liquidators time to prepare funds and liquidate the hacker’s position OTC. As a result, there are no hacker funds left in the system, no bad debts, everything is going well.”

Soft liquidations are part of Curve’s Lending-Liquidation Automated Market Making Algorithm (LLAMMA).

As of June 12, Egorov was borrowing approximately $96 million in stablecoins, mostly Curve’s crvUSD, versus $141 million in CRV, from five accounts across five protocols, according to blockchain intelligence firm arkham.

$140 million CRV nears liquidation

Curve founder Michael Egorov is currently borrowing $95.7 million in stablecoins (mostly crvUSD) against $141 million in CRV across 5 accounts across 5 protocols.

At current rates, Egorov is paying $60 million annually to keep his positions open… pic.twitter.com/ipTlWLZOAx

— Arkham (@ArkhamIntel) June 12, 2024

Industry observers and DeFi experts have previously warned about the potential impacts of such a large debt position.

“This has ramifications across the entire DeFi sector, unfortunately we expect some pullbacks,” Trader ‘MisterSpread’ commented on X on June 13.

“The CRV balance on the exchanges increased by 57% in the last two hours, reaching an all-time high.” observed Crypto Quant founder Ki Young Ju said in a post on X on June 13.

DeFi fallout


CRV prices fell 33% within minutes in late trading on June 12. The DeFi asset is currently trading at $0.283, following a decline from its intraday high of $0.374. CRV is now down a painful 98% from its all-time high of $15.37 in August 2020.

Other DeFi tokens such as gmx and frax share (FXS) are also experiencing losses today, but not as severe.

While markets were steady at $2.58 trillion on the day, Bitcoin and Ethereum saw little movement after declines earlier this week.

SPECIAL OFFER (Sponsored)
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive a special $600 welcome offer on binance (full details).

LIMITED OFFER 2024 on bydfi Exchange: Welcome reward up to $2,888, use this link to register and open 100 USDT-M positions for free!

#DeFi #Token #CRV #Loses #Curve #Finance #Founder #Liquidated