Michael Egorov, founder of Curve Finance, faced liquidation earlier today after the CRV token plummeted to an all-time low of $0.219.
$27 million liquidated
On-chain analyst EmberCN reported that Egorov’s lending positions were largely liquidated, totaling around 100 million CRV, valued at $27 million. Despite this, he still holds 39.35 million CRV, securing $5.4 million in stablecoins on a lending platform.
However, these remaining assets are not at immediate risk of liquidation, as the loan health rate has surpassed 1.
Blockchain intelligence platform SoSo Value noted that Egorov’s situation triggered widespread CRV liquidations across various platforms. Although his actions didn’t create direct selling pressure, he reportedly profited quickly in another manner, potentially disadvantaging lenders and former CRV investors.
It added:
“Curve, as an established DeFi project, is known for its quality and long-term profitability. However, whether this incident will impact Curve’s standing and reduce community cohesion remains to be seen.”
Notably, Arkham Intelligence previously warned that Egorov’s CRV positions worth $140 million across five protocols were at risk of liquidation if the digital asset’s price dropped 10%. The company explained:
“$50 million of Egorov’s crvUSD borrows are on Llamalend, which currently costs him ~120% APY. This is because there is almost no remaining crvUSD available for borrowing against CRV on Llamalend. 3 of Egorov’s accounts already make up over 90% of the borrowed crvUSD on the protocol.”
Meanwhile, this isn’t the first time Egorov’s substantial borrowing on Curve has disrupted the market. Last year, a hacking event resulted in sharp declines in CRV price, forcing several DeFi protocols to prohibit additional CRV borrowing, citing the contagion risk from Egorov’s actions.
Curve’s soft liquidation
Amid the market turmoil, Egorov praised Curve Finance’s soft liquidation mechanism on June 12 for successfully handling a real-world test during the recent UwU lending platform hack.
According to LLAMMA documentation, new loans deposit collateral into multiple bands across the automated market maker (AMM). So, unlike traditional liquidation with a single price, LLAMMA has several liquidation ranges and continuously liquidates collateral if necessary.
He said:
“The system showed a fantastic performance. This gave time for liquidators to prepare funds and OTC-liquidate the hacker’s position. As a result, the system has no hacker’s funds left, no bad debts, everything operates well.”
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