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Cryptocurrency News Articles

Curve Finance Founder Michael Egorov Faced Liquidation as CRV Token Plunged to an All-Time Low of $0.219

Jun 13, 2024 at 05:31 pm

Michael Egorov, founder of Curve Finance, faced liquidation earlier today after the CRV token plummeted to an all-time low of $0.219.

Curve Finance Founder Michael Egorov Faced Liquidation as CRV Token Plunged to an All-Time Low of $0.219

Founder of Curve Finance (CRV) and a prominent decentralized finance (DeFi) figure, Michael Egorov, faced partial liquidation on his lending positions earlier today after the CRV token hit a new all-time low of $0.219.

According to on-chain analyst EmberCN, Egorov’s lending positions were largely liquidated, totaling around 100 million CRV, valued at $27 million. However, he still holds 39.35 million CRV, securing $5.4 million in stablecoins on a lending platform, which are not at immediate risk of liquidation as the loan health rate has surpassed 1.

“Michael Egorov's CRV positions (across 5 protocols) are at risk of liquidation if the price of CRV drops another 10%.

Egorov's CRV positions are currently valued at $140 million, and his borrowing costs are as high as 120% APY on some protocols.”

Blockchain intelligence platform SoSo Value noted that Egorov’s situation triggered widespread CRV liquidations across various platforms. While his actions didn’t create direct selling pressure, he reportedly profited quickly in another manner, potentially disadvantaging lenders and former CRV investors.

“Curve, an established DeFi project, is known for its quality and long-term profitability. However, whether this incident will impact Curve’s standing and reduce community cohesion remains to be seen.”

As reported by CryptoSlate, Arkham Intelligence previously highlighted Egorov’s substantial borrowing, which could be liquidated if the price of CRV dropped. The on-chain analysis firm noted that Egorov had borrowed crvUSD at an interest rate of 120% APY on Llamalend.

“$50 million of Egorov's crvUSD borrows are on Llamalend, which currently costs him ~120% APY. This is because there is almost no remaining crvUSD available for borrowing against CRV on Llamalend. 3 of Egorov's accounts already make up over 90% of the borrowed crvUSD on the protocol.”

This isn’t the first time that Egorov’s large borrowing on Curve has disrupted the market. In March 2023, a hacking event resulted in sharp declines in CRV price, leading several DeFi protocols to ban additional CRV borrowing, citing the contagion risk from Egorov’s actions.

Curve Finance founder reveals how UwU hack was prevented from bankrupting DeFi protocol

Amid the market turmoil, Egorov praised Curve Finance’s soft liquidation mechanism on June 12 for successfully handling a real-world test during the recent UwU lending platform hack.

According to LLAMMA documentation, new loans deposit collateral into multiple bands across the automated market maker (AMM). So, unlike traditional liquidation with a single price, LLAMMA has several liquidation ranges and continuously liquidates collateral if necessary.

“The system showed a fantastic performance. This gave time for liquidators to prepare funds and OTC-liquidate the hacker’s position. As a result, the system has no hacker’s funds left, no bad debts, everything operates well.”

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Other articles published on Nov 24, 2024