The Founder of Curve Finance Faces Liquidation on a Large Loan: CRV Token Price Plummets by 40%
Yesterday, a significant event unfolded in the crypto DeFi realm, as Michael Egorov, the prominent brain behind Curve Finance, found himself in a scenario of liquidation due to substantial borrowing positions totaling $100 million in stablecoin, with CRV as collateral.
- Egorov held open positions on platforms like Inverse, uWuLend, Llamalend, and Fraxlend, with only the Llamalend position facing liquidation consequences.
- The forced collapse in CRV prices by 40% resulted from the cascade of liquidations, affecting the entire DeFi ecosystem.
- Other DeFi protocols experienced pressure as CRV serves as a trading pair and liquidity in various trading pools across the ecosystem.
After Repaying a Bad Debt of $10 Million: The Sale of CRV and Other Assets
Egorov took swift action to inform the crypto community about the liquidation event in DeFi and repaid a significant portion of the bad debt amounting to $10 million, settling 93% and committing to clearing the remaining debt.
- The concept of “bad debt” in finance refers to uncollectible debts, a scenario rampant in DeFi platforms during liquidation cascades.
- Egorov managed the repayment by selling off CRV at a low price, an action that stirred controversy among CRV holders and the crypto community.
- Efforts to mitigate liquidation risks involved quick repayments on multiple platforms like Inverse, UwU Lend, Fraxlend, and Curve LlamaLend.
Acknowledging Market Turbulence: Praise for Curve Finance’s Soft Liquidation Mechanism
Egorov lauded Curve Finance’s soft liquidation mechanism for efficiently handling stress during market turbulence, following the UwuLend protocol hack and CRV price fluctuations.
- The system demonstrated exceptional performance, enabling liquidators to address the hacker’s position and prevent bad debts, resulting in uninterrupted system operations.
- It is crucial to verify the authenticity of news sources, given the misinformation circulating online, including fake claims attributed to Egorov.
Hot Take: Stay Informed and Exercise Caution in the Crypto Ecosystem
As a crypto enthusiast, always remember to prioritize verified information sources to navigate the crypto landscape effectively and avoid falling victim to misinformation or false narratives. Stay vigilant and informed in your crypto ventures to make sound decisions and protect your assets in the ever-evolving crypto sphere.
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