Curve Finance founder, Michael Egorov, has suffered a major setback as the price of CRV, the platform’s native token, plummeted by 40%. This crash resulted in significant losses for both bullish investors and Egorov himself, with blockchain analysis platform Arkham reporting that Egorov faced liquidations totaling $140 million in CRV.
Egorov’s lending position, valued at nine figures, was liquidated across five protocols as the price of CRV dropped below his liquidation threshold. His accounts incurred over a million dollars of bad debt on Curve’s Llamalend, but he managed to clear this by receiving $6 million USDT. Additionally, Egorov experienced a $5 million liquidation on UwU Lend while making repayments on Inverse to mitigate further losses.
The protocol itself incurred $11.5 million in bad debt, which could potentially be resolved if the price of CRV rises to $0.33. Egorov expressed his commitment to working with the Curve Finance team to address the bad debt situation and protect users from its impact.
In response to this crisis, Egorov proposed burning 10% of the total CRV supply to stabilize the token’s price. He also announced that active voters would receive a three-month boost on deposit rewards across all Curve platforms in an effort to incentivize participation and strengthen the ecosystem.
It is worth noting that this is not the first time Egorov has faced significant liquidations. Last year, he borrowed $60 million worth of loans from Aave, posing a risk of bad debt in the event of liquidation. To mitigate this risk, Gauntlet, a risk management firm, recommended freezing Aave’s v2 CRV market. Egorov ultimately sold 106 million CRV for $46 million in a private deal to repay most of his debts on Aave and other lending platforms.
Before the market crash, CRV was trading at $0.3582. However, it dropped to an all-time low of $0.2220, a decrease of nearly 40%. Since then, the token has recovered and is currently trading at $0.2880, which has helped reduce the losses incurred within the 24-hour timeframe to 22%.
Overall, this sudden crash in CRV’s price has dealt a massive blow to Curve Finance and its founder, Michael Egorov, but efforts are being made to stabilize the token’s value and address the bad debt issue.