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DeFi Giant Curve Roiled as Founder's Loans Get Liquidated; CRV Slides 30%
Addresses tied to Curve founder Michael Egorov are borrowing nearly $100 million in various stablecoins against $140 million in curve tokens.
Updated Jun 13, 2024, 7:10 p.m. Published Jun 13, 2024, 8:57 a.m.
- CRV plunges as Curve founder faces multi-million dollar liquidation risk.
- Founder Micheal Egorov has taken a CRV-backed cumulative loan of nearly $100 million, data tracking firms said.
Lending protocol Curve's CRV token plunged Thursday as loans tied to company founder Michael Egorov automatically liquidated, leading to a burst of selling.
Data tracked by blockchain analytics firms Lookonchain and Arkham show Egorov's addresses have taken out a cumulative loan of nearly $100 million worth of stablecoins, mostly crvUSD, against $140 million in CRV collateral.
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Hours after the sudden move in prices, which took CRV's token price down 30% at one point, Egorov acknowledged on X that his positions were liquidated. "I have already repaid 93%, and I intend to repay the rest very shortly. It will help users not to suffer from this situation," he said.
The Curve Finance team and I have been working to solve the liquidation risk issue which happened today.
— Michael Egorov (@newmichwill) June 13, 2024
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…
A Debank profile tracking Egorov's wallet shows he has borrowed from Inverse, UwU Lend, Fraxlend and Curve's LlamaLend using CRV tokens as collateral. Total holdings across tracked wallets are down 50% in the past 24 hours.
Wallet transactions show Egorov actively taking steps to mitigate risks. In the early Asian hours, several loans were repaid on Inverse and Llamalend with FRAX, DOLA and CRV tokens. Some of the addresses also conducted several swaps between CRV and Tether's USDT, the data shows.
The liquidation of such a large position started to put pressure on other DeFi protocols as CRV is used as a trading pair and ballast in trading pools across the ecosystem.
One address on Frax Lend, a different lending and borrowing protocol, saw $3.3 million in liquidated positions as CRV prices fell.
This is the second time Egorov's borrowed positions have created ripples in the crypto market. In 2023, an exploit of several Curve lending pools caused CRV prices to suddenly dump – putting over $100 million at risk of being liquidated.
At the time, DeFi bigwigs such as Tron founder Justin Sun stepped in to supply liquidity and prevent bad debt, acquiring millions in CRV at a discount to prevent the risk of collateral damage across the crypto ecosystem.
UPDATE (June 13, 2024, 16:27 UTC): Updates to add Egorov's X post.
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