Protocol Aims to Clear Debts
Michael Egorov, the founder of decentralized finance (DeFi) protocol Curve, has taken a noteworthy step following the recent hack attack. In an effort to address the hack incident, lending platform Aave has closed its loans today. This move has reduced Curve’s total debt to $42.7 million.
According to on-chain data analytics platform Lookonchain, the Curve founder recently deposited 68 million CRV tokens worth $35.5 million into lending platform Silo over the past two days. Following this step, he borrowed $10.77 million in crUSD stablecoin. Egorov then converted crvUSD to Tether and paid off all his debts on the Aave platform.
According to Lookonchain, all data indicates that the founder of Curve Finance currently holds a collateral of 253.63 million CRV tokens. Additionally, Egorov has a total debt of $42.7 million in four protocols, including Silo, Fraxlend, Inverse, and Cream.
As of August 1st, Curve Finance had a total debt of $100 million, according to allegations made on the platform. Analyst reports suggested that this situation could significantly decrease the value of Curve DAO (CRV) tokens. The feared scenario was that a severe value loss of CRV could trigger liquidations and lead to the platform’s bankruptcy.
Hack Attack Causes Serious Damage
As we have seen in the previous hack attack, this situation could have caused significant drops in many crypto assets, especially Ethereum. Recognizing these risks, Curve Finance founder Egorov made several moves to reduce the platform’s debt and loan utilization rate since August.
During the period when this issue came to light, the CRV token price experienced a significant loss after a $47 million attack due to a security breach in the protocol, as mentioned earlier.
On July 30th, several stake pools on Curve Finance were exploited due to security vulnerabilities in the Vyper programming language. According to the Curve Finance team, this led to the malfunction of the re-collateralization locks and resulted in attacks on the pools. The CRV token price dropped from $0.73 to $0.50 on July 30th due to the impact of the attack.
