- Curve Finance’s founder is facing significant liquidation risks.
- The plummeting price of Curve DAO (CRV) tokens has jeopardized Michael Egorov’s positions.
- “Egorov currently has collateral in the form of 111.87 million CRV (valuing about $33.87 million) and owes $20.6 million across four platforms,” stated blockchain analytics firm Lookonchain.
A deep dive into the unfolding liquidation crisis at Curve Finance.
Curve Finance’s Founder at Risk of Significant Liquidation
Michael Egorov, the founder of Curve Finance, finds himself grappling with substantial liquidation threats as the value of Curve DAO (CRV) tokens continues to decline sharply. In recent hours, Egorov’s positions started getting liquidated, pushing him closer to further loss of assets.
Escalating Financial Challenges Amid Market Turmoil
With a startling 29.23% drop in CRV’s price over the last 24 hours, falling to $0.25, Egorov’s financial stability is teetering. He had secured loans from various DeFi platforms such as Inverse, UwU Lend, Fraxlend, and LlamaLend using CRV tokens as collateral. According to Lookonchain, Egorov holds $33.87 million worth of CRV as collateral and faces $20.6 million in debt.
Efforts to Prevent Complete Liquidation
In a bid to stave off complete liquidation, Egorov initiated a series of strategic moves. Notably, his positions on the Inverse platform began to liquidate early in the day. To mitigate risk, Egorov started repaying his stablecoin debt denominated in DOLA, especially after his health score dipped to 1.07, perilously close to the critical liquidation level of 1.
High Stakes: Analysis from Blockchain Experts
Blockchain analysis firm Arkham illuminated the precarious situation surrounding Egorov. They revealed that his $140 million CRV position is at severe risk of liquidation and that maintaining his position on LlamaLend is costing him an annual fee of $60 million. Arkham also warned that a mere additional 10% drop in CRV’s price could trigger extensive liquidation.
Conclusion
The crisis engulfing Michael Egorov and Curve Finance serves as a stark reminder of the volatility and risks inherent in the DeFi sector. As market conditions remain unpredictable, the ongoing efforts to stabilize Egorov’s positions will be closely watched by industry stakeholders. The coming days will be crucial in determining whether Egorov can avert further financial damage or succumb to the cascading effects of the current market downturn.
