Curve Finance Faces $27M Liquidation Crisis Amid Historic CRV Plunge


The token has now lost 98.88% of its value at its highest price ever.

Michael Egorov, the founder of Curve Finance, faced a major setback today as the CRV token dropped to a new low of $0.219, leading to many CRV liquidations. The token has now lost 98.88% of its value at its highest price ever.

On-chain analyst EmberCN reported that Egorov’s lending positions were mostly liquidated, totaling about 100 million CRV, valued at $27 million. Despite this, he still holds 39.35 million CRV and has secured $5.4 million in stablecoins on a lending platform. These assets are currently safe from liquidation.

Egorov’s $140M CRV Position Triggers Liquidations

Arkham Intelligence had previously warned that if the price of CRV dropped by 10%, Egorov’s CRV positions worth $140 million across five protocols would be at risk of liquidation. They noted that $50 million of his CRV borrowing is on Llamalend, which is costing him around 120% APY because there is almost no crvUSD left to borrow against CRV on Llamalend. Egorov’s accounts make up over 90% of the borrowed crvUSD on this platform.

Even though Egorov didn’t create direct selling pressure, he profited in another way that might hurt lenders and former CRV investors. An Ethereum core developer tweeted that Egorov didn’t lose much from the CRV liquidation. He gained $100 million from his $140 million CRV position, avoiding the backlash that would have come from selling the tokens on the open market. Though his $140 million CRV will be fully liquidated, he won’t have to repay nearly $100 million in stablecoins he borrowed, avoiding accusations of “maliciously dumping tokens.”

However, the Curve Finance founder stated that he and his team have been working to resolve the liquidation risk issue that occurred. In a recent tweet, he mentioned that he has already repaid 93% and intends to repay the remainder shortly, which will help mitigate the impact on users.

This isn’t the first time Egorov’s large borrowings on Curve have disrupted the market. Last year, a hacking incident caused a sharp drop in CRV’s price, prompting several DeFi protocols to stop additional CRV borrowing to avoid risks from Egorov’s actions. After the hack, some venture capital firms bought CRV tokens to support Curve and stabilize the price, paying $0.4 per CRV. However, with the current price at $0.26, those investors have seen a 35% loss.