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The native asset of the DeFi protocol Curve Finance, CRV, experienced a significant drop due to a reentrancy attack, prompting the project’s founder, Michael Egorov, to take measures to hedge his personal DeFi position. Amidst the market turmoil, Egorov undertook notable transactions, including repaying a 5.13 million FRAX stablecoin loan and reclaiming 12.5 million CRV tokens as collateral.
Investors Engage in Intensive Short Selling
CRV, the native asset of Curve Finance, dropped from $0.73 to $0.5 following a reentrancy attack on the protocol. While the project’s founder is struggling to alleviate the pressure on the CRV collateral he provided for the loans, investors are taking positions expecting further price decline.
CRV’s value dropped to $0.5, the lowest point since November of the previous year, before recovering to $0.59 earlier today. Data from Coinalyze shows that open interest in perpetual futures tied to CRV has exceeded $124 million. The data, including negative funding rates tracked by Coinalyze, suggests that investors may be engaging in intensive short selling of CRV due to the expectation of further price decline. Meanwhile, Curve Finance’s founder, Michael Egorov, remains focused on hedging his personal DeFi position.
Three Significant Transactions by Curve Finance’s Founder
Amidst the volatile price fluctuations, Egorov executed several important transactions. He repaid a notable $5.13 million FRAX stablecoin loan and reclaimed the 12.5 million CRV tokens he had deposited as collateral. Observers are also noting chain data indicating that Egorov moved the 12.5 million CRV from Fraxlend to a new wallet. Prior to this transaction, Egorov was seen acquiring the largest stablecoin, USDT, from anonymous wallets. This purchase raised speculation about potential OTC deals or transactions outside the main platform.
Blockchain security firm PeckShield reported another significant move, stating that a wallet address labeled as belonging to Tron founder Justin Sun withdrew $2 million USDT from the crypto lending protocol Aave before sending it to Egorov. In return, Egorov transferred approximately 5 million CRV (approximately $2.9 million) to Sun, indicating another off-platform transaction.
These dynamics have raised concerns in the cryptocurrency world. According to DeBank records, Egorov currently has a debt of 176 million CRV (approximately $181 million) borrowed from Aave. If the price of CRV drops by only 33%, it will trigger the liquidation of the CRV collateral Egorov provided for this position.
