DeFi
Curve Finance founder Michael Egorov hit amid $22 million CRV liquidation stunt
Over $20 million in CRV-backed positions were liquidated this morning, as was the price of Curve Finance’s governance token. abandoned by more than 30% in one hour.
Curve founder Michael Egorov was hit hard, with 20 million CRV guarantees liquid on UwU Lend, a decentralized finance (DeFi) platform created by the infamous 0xSifu, aka Michael Patryn.
Loans from Egorov on Inverse Finance (worth $6.5 million) and Silo Finance (worth $14.3 million) were also liquidated.
Learn more: Sifu’s UwU Lend Reportedly Hacked for $20 Million, Curve’s Egorov Among Those Affected
A dashboard by Parsec Finance user @kez shows a total of $22 million in CRV liquidations which accompanied a drop in price from around $0.36 to a low of $0.23. CRV is currently worth $0.27, according to data from CoinMarketCap.
In what is known as a “liquidation cascade,” CRV collateral was sold by liquidation bots, which further depressed the price of CRV, forcing additional positions to cross their liquidation threshold.
The Mich saga
On the eve of today’s events, Curve founder Michael Egorov held over $140 million in leveraged CRV positions, securing $95 million in stablecoin loans across five DeFi lending protocols. Arkham, blockchain analysis company calculated the annualized borrowing cost for all positions amounts to $60 million.
Egorov has long borrowed stablecoins against CRV to avoid selling his own project’s token on the open market, which would prove extremely unpopular with the community and involve significant impact on prices.
However, the strategy has often been criticized as a burden on the Curve community, with the ever-present threat of a liquidation cascade driving down the price of CRV hanging over holders.
After last summer To hack from Curve Finance, Egorov was bailed out by a number of DeFi “whales” in a six-month Gentleman’s Agreement. In February, when the handshake deal was concluded, a number of counterparties apparently threw away their part for a modest profit of 10%.
Just three days ago, Egorov was among those affected by a $20 million hack on UwU Lend. The loss was reduced to defective oracle and, shortly after the resulting bad debt was refundedthe platform was raided for another $3.7 million this morning.
Learn more: Curve chief nearly liquidated for $150 million in CRV during weekend crypto crash
Before the start of the liquidations, Egorov had been shilling the “soft liquidation” mechanism on Curve’s LlamaLend, based on how the system responded to the UwU attacker’s use of the platform.
Meanwhile, Patryn, creator of UwU Lend and convicted fraudster, played the other side of Egorov’s trade, shorting CRV and removing stable liquidity from Curve’s lending module in order to drive up the costs of Egorov’s loan.
While millions of dollars in liquidated collateral would normally be bad news for a DeFi user, a few to have underlines that maybe this was Egorov’s plan all along.
Curve Finance representatives have contacted Protos to confirm that they are currently evaluating the information and will provide official comment from Michael Egorov in due course.
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