Curve founder faces liquidation as CRV token price drops 28%

Curve (CRV), a popular decentralized finance (DeFi) protocol known for facilitating low-cost stablecoin trading, is facing a double whammy as its native token, CRV, faces a 28% price drop. in the last 24 hours and millions of dollars in liquidations. CRV guarantee.

According to Coinmarketcap datathe token’s value fell to $0.256, marking a sharp decline of 28% over the past 24 hours, with a notable crash over the past few hours.

The sudden price drop is attributed to growing panic among CRV holders, triggered by a report from crypto intelligence platform Arkham. The report revealed that Curve founder Michael Egorov borrowed a significant amount – $95.7 million in stablecoins (primarily crvUSD) – using $141 million worth of CRV as collateral across five different protocols.

Michael faces additional liquidation risk with his on-chain loans following an earlier partial liquidation of his positions on Thursday. Egorov “currently has 111.87 million CRV ($33.87 million) in collateral and $20.6 million in debt across four platforms.” said Watch on the channel.

Michael had borrowed various stablecoins from DeFi platforms such as Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend, using CRV tokens as collateral. Arkham had predicted that Egorov’s $140 million in CRV positions were about to be liquidated and noted that he would incur $60 million per year to maintain his positions on LlamaLend.

Earlier today, Egorov began facing liquidations on Inverse but took steps to mitigate the risk. His position in Inverse had a health rate of 1.07, with liquidation usually triggered at a rate of one. According to on-chain data, Egorov started repaying the borrowed DOLA stablecoin to improve his position. However, his loan at UwU Lend remains under threat.

This rapid liquidation suggests potential financial difficulties or risk management issues for Egorov. It also highlights the inherent volatility and risks associated with leveraging crypto assets for borrowing.

As of now, there has been no public response from the Curve Protocol founder or the Curve Finance team regarding the CRV price drop. Egorov notably addressed liquidation risks in response to a user query on another platform, but this was almost 10 hours before the current price drop.

The lack of official communication from Curve executives further disturbs investors. The situation highlights the crucial need for transparency and responsible risk management in the DeFi space, particularly when founders engage in leveraged positions that can have a significant impact on project stability.

Read also: Injection (INJ) increases by 11% after CPI data and burning of 6 million tokens

Fuente