Curve Founder Michael Egorov Repays Aave Debt, Still Owes $42.7 Million to Other DeFi Protocols
Michael Egorov, the creator of decentralized finance (DeFi) platform Curve, recently settled his debt on the lending protocol Aave. However, he still has outstanding debts totaling $42.7 million across four other DeFi protocols.
Egorov used 68 million CRV tokens (worth $35.3 million) as collateral on Silo, a decentralized lending platform, to borrow Curve’s stablecoin, crvUSD. He then exchanged crvUSD for Tether’s USDT stablecoin, ultimately paying off his debt on Aave.
Currently, Egorov holds 253.7 million CRV tokens (equivalent to $132 million) as collateral on Silo and has accumulated an additional 10.8 million crvUSD as a loan on the same platform.
His remaining debts are distributed among different protocols: 10 million DOLA ($10 million) on Inverse, 13.1 million FRAX ($13.1 million) on Fraxlend, $2.5 million in USDC and USDT debt on Cream, and the most recent 17.1 million crvUSD ($17.1 million) on Silo.
Curve Founder Michael Egorov Addresses Debt Crisis and DeFi Market Concerns
In August, concerns arose when it was revealed that Egorov had accumulated a $100 million debt across various DeFi platforms, backed by over 400 million CRV tokens. This raised worries about the potential impact on the price of CRV tokens and the stability of the entire DeFi market.
To mitigate these risks, Egorov has been actively reducing his debt and utilization rate. In April, he borrowed approximately $64 million on Aave, using 288.7 million CRV tokens as collateral. This represented 34% of the total CRV token supply.
Furthermore, Curve experienced a hack in July that affected its liquidity pools, resulting in a loss initially estimated at $70 million. The hack had a significant negative impact on the market, causing CRV prices to drop by over 12% and potentially putting Egorov’s loan positions at risk.
Michael Egorov Sells 106 Million CRV Tokens to Address Debt
To address his outstanding debt across multiple DeFi platforms, Egorov sold 106 million CRV tokens, generating $46 million. These tokens were exchanged for stablecoins in a series of OTC deals, with notable buyers including Wintermute, Justin Sun, and Jeffrey Huang.
While Curve DAO has shown steady growth, it faces increased competition for market share. Although it remains one of the fastest-growing DAO-based projects with practical applications, its growth rate has slowed down this year.
The price of CRV experienced a surge earlier in 2021 but has since stabilized following the security breach and subsequent price drop. Currently trading at $0.5176 with a market capitalization of $455 million, the announcement of collaborations and debt repayment may contribute to an upward trend in price.
Hot Take: Curve Founder Michael Egorov Tackles Debt Crisis Amidst DeFi Market Challenges
Michael Egorov’s proactive approach to addressing his debts and reducing risks demonstrates his commitment to maintaining stability within the DeFi ecosystem. By repaying his Aave debt and selling CRV tokens through OTC deals, he has taken significant steps towards resolving the $100 million debt crisis.
While the market remains cautious due to recent hacks and price fluctuations, Egorov’s actions inspire confidence in Curve’s ability to overcome challenges and continue growing. As the DeFi landscape evolves, it will be crucial for projects like Curve to adapt and innovate to maintain their competitive edge.
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