The Death of DeFi: Lessons from Curve Founder Michael Egorov’s Actions
The recent behavior of Curve founder Michael Egorov serves as a warning to the crypto community and highlights the similarities between decentralized finance (DeFi) and traditional finance. While DeFi itself did not cause its own downfall, Egorov’s actions demonstrate the demise of the spirit that drove the DeFi movement.
Key Points:
- Egorov leveraged his CRV tokens to take out millions of dollars in loans, putting the entire DeFi ecosystem at risk.
- The hack of Curve trading pools triggered a potential “death spiral” that could have brought down the sector.
- A series of behind-the-scenes deals, including help from TRON founder Justin Sun, saved Egorov from liquidation.
- Questions arise about the lack of intervention and safeguards in the DeFi space, as well as the concentration of power in the hands of a few individuals.
- This incident highlights the greed and hypocrisy present in both traditional finance and DeFi.
Despite Egorov’s last-minute rescue, this event exposes the underlying issues within DeFi. It is no longer the democratic and defiant system it claimed to be, but rather controlled by a few influential figures. Everyday crypto holders often bear the brunt of trading fees and complex concepts like impermanent loss, making DeFi largely inaccessible and unprofitable for them. The nonchalant attitude towards financial crises in the crypto community raises questions about the true value of cryptocurrencies beyond being fake internet money.
Hot Take:
The incident involving Curve founder Michael Egorov’s actions signals the death of the original spirit of DeFi. It exposes the flaws and similarities between traditional finance and DeFi, including greed and hypocrisy. While the crypto community may brush off such events as just another chaotic day, it begs the question of whether cryptocurrencies were ever meant to hold any real significance beyond being digital assets.
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