Curve DeFi protocol’s head faces $27 million liquidation of positions

The native token CRV has collapsed to an all-time low

13.06.2024 - 14:12

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2 min

What’s new? Michael Egorov, the founder of the Curve Finance DeFi protocol, has seen his leveraged position of 100 million CRV native tokens worth $27 million liquidated. That said, he still holds 29,35 million CRV on the lending platform, which is not currently at liquidation risk.

Source: x.com

What else is known? Using CRV tokens as collateral, Egorov borrowed various stablecoins from the lending protocols Inverse, UwU Lend, Fraxlend, and LlamaLend.

Experts at the blockchain analytics platform Arkham Intelligence warned a day earlier that Egorov’s $140 million position in CRV could be liquidated if the token’s price falls by 10%. Over the past 24 hours, the CRV exchange rate has collapsed by 41% and hit an all-time low of $0,219.

Source: x.com

Before the collapse, Egorov held $95,7 million in borrowed positions in stablecoins, mostly crvUSD, with a $141 million pledge in CRV tokens through five protocols.

He borrowed $50 million in cvrUSD through Llamalend with a 120% APR. This is because there was almost no crvUSD available to borrow against CRV collateral on Llamalend. Egorov’s 3 accounts accounted for over 90% of crvUSD loans in the protocol.

Last August, Egorov’s actions also significantly shook the market. Back then, a hacker attack on Curve led to a sharp decline in CRV, prompting several protocols to prohibit additional borrowings of the asset, citing the risk of contagion from Egorov’s actions.

Egorov has since sold 106 million CRV for $46 million in deals to mitigate potential liquidation risks associated with his outstanding debt on various DeFi platforms, including Aave.

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