Curve DAO Token (CRV) has drawn attention recently due to a 12% drop in value. This decline became prominent following the liquidation of Michael Egorov, the founder of CurveFI, resulting in a loss of $882.66 thousand. Egorov faced these losses just two days after making a substantial purchase.
Liquidation Process and Lost Funds
The liquidation on December 19 was triggered by Egorov’s acquisition of 1.08 million CRV tokens on December 17. With this purchase, valued at approximately $1.2 million, he aimed to strengthen his position. However, the rapid 12% devaluation of the CRV token prompted liquidation risk for Egorov’s accounts, resulting in a loss of around 918.83K tokens and totaling $882.66 thousand.
In a statement following the liquidation, Egorov explained that “the liquidated tokens consisted of receipts used for the return of hacked funds.” He also noted that the liquidation was a result of theft and that the lost tokens were not genuine CRV tokens. These claims have led to further speculation in the market.
Market Fluctuations and Investor Reactions
After the liquidation incident, the price of the CRV token fell to as low as $0.9375. Within a 24-hour period, the token hit a low of $0.90 before recovering to $1.07, showcasing significant volatility. This fluctuation reflected overall market uncertainty and prompted a cautious approach among investors.
Currently, the total market capitalization of CRV stands at $1.17 billion, with a daily trading volume of $536 million. Investors have learned the importance of being more cautious when taking large positions amidst volatility.
Ultimately, this liquidation incident highlighted the high risks associated with leveraged transactions and how market fluctuations can impact investments. Careful strategies and risk management have become crucial for investors more than ever.
