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 30% in early Asian trading hours as some loan positions supposedly tied to its founder, Michael Egorov, started to automatically liquidate, leading to sudden selling activity.
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.
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 that Egorov is 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 (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.