Michael Egorov, founder of Curve Finance, has once again been liquidated on one of his last positions in CRV. The liquidation comes just days after Egorov bought new CRV to prop up the token’s sliding price.
One of Michael Egorov’s addresses was liquidated after the cryptocurrency market saw another daily decline. The wallet, which was identified as owned by the founder of Curve (CRV), was liquidated with 918.83 thousand CRV, worth over $898 thousand.
This liquidation comes after Egorov’s last $1.2 million buyback on December 17. Egorov bought back at $1.11, after a temporary withdrawal from CRV. The buyback was Egorov’s first return to CRV, after he was liquidated for $140 million on June 13.
Egorov warned that the latest move did not actually affect the real CRV, but was a technical measure to cover losses from the UwU Lend hack in June. The transaction served as an on-chain receipt for the losses Egorov had already incurred in the hack. He stated that the liquidation was a testament to the expected repayment from Sifu, the founder of UwU Lending. Despite the warning, news of the liquidation had a contagious effect, deepening CRV’s losses and leading to additional liquidations.
Curve offers soft liquidations, which attempt to protect collateral. There are also hard liquidations, as well as self-liquidations. Self-liquidations are available to those who already hold positions in soft liquidation and are in poor health. The recent CRV pullback may have prompted some users to close their positions at the current price range.
The project founder is still an active DeFi user, with swaps between CRV and stablecoins. Egorov's wallet also outflows small amounts of stablecoins to DeFi pools and protocols.
Egorov bought back CRV as a tool to support sentiment and get more tokens at a lower price range. CRV can then be used as collateral to borrow stablecoins for other DeFi tasks. This approach works during favorable conditions, but it can lead to deep liquidations.
Despite the liquidation, CRV is still trading near its 2024 upper range. The token peaked at $1.25, later dropping to $0.94 as the overall market took a pullback. CRV is still down from its 2021-2022 market peak during the previous bull cycle, when the underlying asset traded above $5.
Liquidations on other CRV borrowers have caused the token price to drop. CRV is likely to revisit lower positions, as active traders may buy back in.
CRV’s open interest has declined in the past month, from a peak of over $260 million to $179 million. Buying levels are above 60%, still showing some confidence in a price recovery. However, a pullback could see those positions hit and liquidated.
Curve Finance also pales in comparison to its impact in the previous DeFi boom. The platform’s liquidations have relegated it to a less influential position, and new protocols have replaced it. However, Curve is a core part of today’s DeFi mission, providing access to liquidity with a certain level of liquidation risk.
Currently, Curve is still in the 20th position based on total value locked. The protocol holds around $2.37 billion, down from a peak of over $23 billion during the peak of the bull market in 2021. Curve lost its initial hype after multiple liquidations, and was heavily impacted by the failure of Terra (LUNA) in 2022.
The protocol is now more conservative about its liquidity pools, and is trying to rebuild its reputation. The hub is still available on 19 chains, although Ethereum is still the most active. The protocol holds 3.48% of the cryptocurrency market, with daily volumes of over $386 million.
The curve is now ranked 20th based on the available value locked. The protocol still has a legacy influence, with 88,982 people. The coin also participates in Aave, which has 3.6 million tokens.