Curve Finance founder Michael Egorov faced increased liquidation risk early on June 13 after part of his positions were liquidated. According to Tradingview data, the price of Curve DAO token, associated with the decentralized exchange, dropped by 25% in the last 24 hours, trading at $0.262 at the time of writing.
Notable Development for Curve
According to the blockchain data analysis platform Lookonchain, Egorov currently has collateral of 111.87 million CRV tokens worth $33.87 million and a debt of $20.6 million across four platforms. Egorov used CRV tokens as collateral to borrow various stablecoins from DeFi platforms Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend. Early today, Egorov started to be liquidated on Inverse but later took measures to mitigate other risks.
Egorov’s underwater position currently has a health ratio of 1.07, where liquidation is typically triggered when the number reaches one. On-chain data shows that Egorov has started repaying the borrowed stablecoin DOLA. The loan taken from UwU Lend remains underwater.
What’s Happening on the Curve Front?
Blockchain data analysis firm Arkham predicted early on June 12 that Egorov’s $140 million CRV positions were approaching liquidation and added that the Curve founder would pay $60 million annually to maintain his positions on LlamaLend.
The blockchain data analysis firm estimated that a roughly 10% drop in CRV’s value would trigger the liquidation of Egorov’s positions. In August 2023, Egorov sold 106 million CRV for $46 million in deals to mitigate potential liquidation risks associated with his outstanding debt on various DeFi platforms, including Aave.
This process clearly shows that many blockchain platforms could be in the same situation. Recently, the crisis within Curve deepened, especially after a hack attack, which could lead to many developments for the platform soon.
