700K$ Bad Debt in Curve LlamaLend: Egorov's Solution

The severe market crash on October 10 led to approximately $700,000 in bad debt on Curve's lending platform LlamaLend. Curve founder Michael Egorov proposes solving this issue with a market mechanism-based method. It will allow stuck lenders to turn their deposit claims into tokenized assets and sell them in a special Curve pool. Buyers will place an option-like bet on CRV's recovery by conducting CRV detailed analysis. Egorov invites Curve DAO to the process but does not make it mandatory.

LlamaLend Crash: Trump Tariffs and 19 Billion Dollar Liquidation

The crash was triggered by Donald Trump's announcement of customs tariffs on Chinese goods and caused $19 billion in leveraged liquidations within hours. In LlamaLend's CRV-long market, users were borrowing crvUSD stablecoin against CRV collateral; when prices dropped rapidly, liquidations were delayed. Although the LLAMMA mechanism aims to reduce risk by gradually converting collateral, the market moved so fast that arbitrageurs couldn't keep up. Lenders are left with a vault token where their positions remain approximately 70% supported.

Egorov's Tokenized Pool Solution and CRV Recovery Target

Egorov emphasizes that this token will not lose more value during CRV drops but will reverse if it rises; CRV needs to reach $1.24 for full recovery. The proposed pool uses the Stableswap design with a 1% swap fee, concentrating liquidity around 71% solvency. Stuck parties can sell at a discount to exit, while buyers place long-term bets on CRV. This approach differs from industry collective rescue efforts (like DeFi United) in cases such as the $230 million bad debt on the AAVE detailed analysis platform.

CRV Current Technical Analysis: Supports and Resistances

Current CRV price at 0,23$ level, 24-hour change +%0,18. RSI 50,88 (neutral), overall trend upward but Supertrend giving sell signal. EMA 20: 0,2257$. Strong supports: S1 0,2241$ (85/100 score, -%1,19 distance), S2 0,2015$ (61/100). Resistances: R1 0,2309$ (76/100, +%1,81), R2 0,3247$ (+%43,17). Check CRV futures for CRV futures. If successful, this model could become standard in Curve and similar protocols.