Market Makers Step in to Support Curve’s CRV Following Attack
Crypto market makers on Binance have come to the rescue of Curve’s native token CRV after an attack on the decentralized exchange caused the cryptocurrency to plummet. Here are the key points to know:
– Market makers responded by increasing buy orders for CRV on Binance, doubling the bid-side market depth.
– This increase in liquidity allowed the market to absorb large orders at stable prices and protected the cryptocurrency from further decline.
– Clara Medalie, director of research at Kaiko, explains that market makers typically pull orders during market events to avoid unfavorable price swings, but in this case, liquidity was added to the CRV order books.
– The drop in CRV price raised concerns about the potential liquidation of Curve founder Michael Egorov’s borrowings collateralized by CRV, which could have destabilized the decentralized finance market.
– Despite the initial panic, the situation has been stabilized, and the bid-side depth on Binance has doubled, while liquidity on other exchanges remained relatively unchanged.
Hot Take
The swift response of market makers to support Curve’s CRV demonstrates the importance of liquidity in the crypto market. By doubling the bid-side depth, they prevented further decline and potential market-wide contagion. This incident highlights the risks and vulnerabilities of decentralized exchanges and the crucial role of market makers in maintaining stability.
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