The CRV token from the Curve lending platform has experienced a significant 30% drop this morning, following the automatic activation of liquidations of certain loan positions supposedly linked to Michael Egorov, the founder of Curve.
According to data analysis by Lookonchain and Arkham, Egorov has reportedly borrowed a total of approximately $100 million in stablecoins, mainly in crvUSD, against collateral of $140 million in CRV tokens.
Egorov’s Financial Profile and Mitigation Measures
The Debank profile tracking Egorov’s wallet shows that he has borrowed from various protocols such as Inverse, UwU Lend, Fraxlend, and LlamaLend on Curve, using CRV tokens as collateral.
Recent transactions in his wallet indicate that Egorov has taken active measures to mitigate risks, including repaying several loans on Inverse and LlamaLend with FRAX, DOLA, and CRV tokens. Sales of CRV for USDT have also been observed.
Impacts on the DeFi Ecosystem and Context
This large liquidation has begun to put pressure on other DeFi protocols, as CRV is used in trading pools across the ecosystem. An address on Frax Lend, another lending and borrowing protocol, experienced the liquidation of $3.3 million positions as the price of CRV decreased.
This is not the first time that Egorov’s borrowed positions have caused turbulence in the crypto market. In 2023, a hack of multiple Curve lending pools resulted in a sudden drop in CRV prices, putting over $100 million at risk of liquidation. At that time, prominent figures in decentralized finance, such as the founder of Tron, Justin Sun, stepped in to provide liquidity and prevent bad debt by acquiring millions of CRV at a discounted price to prevent the risk of collateral damage throughout the crypto ecosystem.
