The Curve DAO (CRV) ecosystem is witnessing turmoil as its founder, Michael Egorov, faces potential liquidation. With $141M in CRV as collateral and $95.7M in stablecoin loans, Egorov’s positions are at risk. The situation is exacerbated by a sharp decline in CRV’s price, leading to increased liquidations and a record high of CRV balances on exchanges.
Michael Egorov, the founder of Curve DAO, is currently in a precarious position as reported by onchain data firm Arkham. He has $141 million in CRV as collateral and $95.7 million in loans, primarily in stablecoins. These loans are spread across five accounts on five different protocols.
Besides, Arkham notes that he is paying $60 million annually to maintain his positions on Llamalend. However, the declining CRV price has intensified the risk of liquidation. If the price continues to fall, Egorov could face cascading liquidations, further impacting CRV’s market value.
In response to the sharp decline, notable movements in CRV have been observed. Lookonchain reported that Egorov currently has $33.87 million in collateral and $20.6 million in debt on four platforms. Consequently, the whale activity has surged, with substantial deposits of CRV into exchanges.
For instance, a whale deposited 24.2 million CRV, valued at approximately $6.936 million, into Binance. This influx has pushed the CRV balance on exchanges to an all-time high, rising by 57% in just a few hours as reported by CrptoQuant’s Ki Young Ju and echoed by analyst Wise Advice.
Frax Finance, a DeFi protocol, addressed concerns regarding their exposure to CRV. They confirmed that there is no bad debt on Fraxlend due to their partial liquidation and isolated lending design. Over nearly two hours, at the time of the report, Fraxlend successfully liquidated around $13 million in debt tied to CRV. This proactive approach has mitigated potential risks for Frax Finance, showcasing the resilience of their lending framework.
Cowen Highlights Market Deja Vu with Fed Rate Moves in 2019 and 2024Despite these efforts, the broader market sentiment around CRV remains bearish. According to CoinGecko, CRV’s price has plummeted by 20% and 40% over the past day and week. The price, at press time, is at $0.2864, with a daily trading volume of $767 million.
