The cryptocurrency world has been abuzz with the news of Curve Finance founder Michael Egorov facing potential liquidation of his on-chain loan positions amid a sharp drop in the price of the Curve DAO (CRV) token.
CRV Token Plummets 25% in 24 Hours
The price of the Curve DAO token, which is closely linked to the decentralized exchange Curve Finance, has fallen by over 25% in the past 24 hours, trading at $0.262 at the time of writing. This steep decline in the CRV token price has put Egorov’s on-chain loan positions at risk of liquidation.
Egorov’s Collateralized Positions Facing Liquidation
According to on-chain data, Egorov currently has 111.87 million CRV ($33.87 million) in collateral and $20.6 million in debt across four DeFi platforms, including Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend. Earlier today, Egorov had started to get liquidated on Inverse, but he has taken measures to mitigate further risks.
“Egorov’s position on Inverse currently has a health rate of 1.07, where liquidation is typically triggered when the number reaches one. Egorov has begun repaying the borrowed stablecoin DOLA, on-chain data shows.”
Egorov’s CRV Positions Nearing Liquidation
Blockchain intelligence firm Arkham had forecasted earlier on Wednesday that Egorov’s CRV positions worth $140 million were nearing liquidation, adding that the Curve founder is paying 120% in annualized rates to maintain his positions on LlamaLend. The firm predicted that a drop in CRV’s value of around 10% would trigger Egorov’s positions to be liquidated.
Egorov’s Previous Efforts to Reduce Liquidation Risks
In August 2023, Egorov sold 106 million CRV for $46 million in deals to reduce potential liquidation risks associated with his outstanding debt across various DeFi platforms, including Aave. However, the recent sharp drop in CRV’s price has once again put Egorov’s on-chain loan positions at risk of liquidation.
As the cryptocurrency market continues to experience volatility, the Curve Finance founder’s situation serves as a cautionary tale for those who leverage their digital assets as collateral in DeFi lending platforms. The potential for sudden price drops and the resulting liquidation of positions remains a significant risk that must be carefully managed.
