Michael Egorov, the founder of Curve Finance, has experienced another liquidation on one of his Curve (CRV) token positions. This latest liquidation, which occurred just days after Egorov purchased additional CRV tokens to support its declining price, involved the loss of 918,830 CRV, valued at approximately $898,000.
This comes after Egorov repurchased $1.2 million worth of CRV at $1.11 per token on December 17, following a temporary market downturn. The transaction was Egorov’s first significant CRV buyback since June 13, when he suffered a substantial $140 million liquidation event.
Liquidation tied to previous UwU lend hack
Egorov explained that the most recent liquidation did not directly involve tangible CRV holdings but was related to previous losses tied to the UwU Lend hack in June. According to Egorov, the liquidation functioned as an on-chain receipt to cover those earlier losses and was linked to expected repayments from UwU Lend’s founder, Sifu.
Despite these clarifications, the news had a ripple effect on the market. CRV prices experienced additional declines, triggering more liquidations from other borrowers and worsening the token’s market performance. Curve Finance offers mechanisms like soft and hard liquidations to manage collateral risk. However, the recent price drop likely prompted some users to close their positions, leading to further volatility.
CRV price declines amid market pressure
CRV has struggled to recover, even as Egorov’s buybacks attempted to stabilize sentiment. While the token hit a 2024 peak of $1.25, it dropped to $0.94 following broader crypto market declines. This remains significantly lower than its 2021 bull market peak of over $5.
Liquidation events, including Egorov’s, have contributed to the token’s challenges. Open interest in CRV futures has also declined, recently falling from $260 million to $179 million. While long positions still dominate over 60%, the token remains vulnerable to further market downturns.
Curve’s position in DeFi and market standing
Curve Finance, once a leading platform during the decentralized finance boom, has diminished its influence in recent years. Despite holding $2.37 billion in total value locked, down from a peak of over $23 billion in 2021, the platform remains critical for specific DeFi tasks. Curve handles over 95% of all trading for Ethena’s sUSDe stablecoin and processes $386 million in daily volumes.
Though now ranked 20th among DeFi protocols, Curve continues to operate across 19 blockchain networks, with Ethereum being the most active. The platform is working to rebuild trust by adopting a more conservative approach to liquidity pools after setbacks such as the Terra (LUNA) collapse in 2022. Despite these challenges, it remains a key player in DeFi, supported by 88,982 token holders and 3.6 million CRV tokens tied to Aave’s lending pools.
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