Curve Finance recently faced a real-world test of its soft liquidation mechanism during a hacking attempt, leading to a 28% drop in the CRV token price. Despite this, the liquidation process worked as intended. Founder Michael Egorov managed substantial liquidation pressures on June 13 by executing multiple liquidations, repayments, and withdrawals on DeFi platforms. The mechanism, part of Curve Finance's LLAMMA, ensures liquidations without incurring bad debts. However, positions in soft-liquidation may suffer losses. Although the protective measures functioned well, the market reacted with a sharp CRV price decline. This incident highlights the systemic risks associated with Egorov's debt obligations. The event underscores the importance of understanding and managing risks in the crypto space, as demonstrated by Curve Finance's handling of the situation. Read more AI-generated news on: https://app.chaingpt.org/news