Michael Egorov, the founder of Curve Finance, faces the risk of liquidation of positions worth approximately 140 million CRV due to a significant drop in the native token’s price, according to analysts at Arkham Intelligence.
$140M CRV nearing Liquidation
Curve founder Michael Egorov is currently borrowing $95.7M in stablecoins (mostly crvUSD) against $141M in CRV, across 5 accounts on 5 protocols.
Based on current rates, Egorov is paying $60M annualized in order to keep his positions open on… pic.twitter.com/ipTlWLZOAx
— Arkham (@ArkhamIntel) June 12, 2024
According to Lookonchain’s calculations, the entrepreneur has 111.87 million CRV ($33.87 million) as collateral for a loan and a debt of $20.6 million in various stablecoins across four platforms, including Inverse, UwU Lend, Fraxlend, and Llama Lend.
The #Curvefi founder(Michale Egorov) is being liquidated!
He currently has 111.87M $CRV($33.87M) in collateral and $20.6M in debt on 4 platforms.https://t.co/WM1nW8JKwU pic.twitter.com/huwgetBXuS
— Lookonchain (@lookonchain) June 13, 2024
Experts at Arkham Intelligence noted that Egorov’s $50 million loans in crvUSD on the Llama Lend lending platform currently cost him approximately 120% annually ($60 million).
“There is almost no crvUSD left to borrow against CRV on Llama Lend. Egorov’s three accounts already make up over 90% of the borrowed crvUSD on the protocol. If the price of CRV drops by about 10%, these positions may start to liquidate,” the researchers wrote.
According to Parsec, on the morning of June 13, collateral positions in CRV worth ~$22.6 million were liquidated within four hours, with about $15 million liquidated within an hour.
Immediately after, a user with the address sifuvision.eth purchased 1.37 million CRV for 300,000 USDT, writes Lookonchain. He is currently shorting the asset, with a current debt in the UwU Lend DeFi protocol of 15 million CRV ($4.04 million).
sifuvision.eth spent 300K $USDT to buy 1.37M $CRV at a low price of $0.2184 after CRV was liquidated in large quantities.
Sifu is short $CRV and currently has a debt of 15M $CRV($4.04M) on# UwULend.
Before $CRV was liquidated today, Sifu withdrew 6M $crvUSD from Curve… pic.twitter.com/31VlxLvW2S
— Lookonchain (@lookonchain) June 13, 2024
Additionally, before the liquidation, this trader withdrew 6 million crvUSD from Llama Lend, causing Michael Egorov’s loan rates to rise.
According to DeBank, to mitigate further risks, the entrepreneur has begun repaying the borrowed stablecoin DOLA.
Recently, the founder of Curve Finance praised the “soft” liquidation mechanism on the Llama Lend platform, which allowed the recently hacked UwU Lend to close the hacker’s positions.
Was not planned, but fascinating how soft liquidations work on https://t.co/bdUCarOsuM. There are docs at https://t.co/zQjPsRK8lQ (same as for crvUSD).
The system showed a fantastic performance. This gave time for liquidators to prepare funds and OTC-liquidate the hacker’s… https://t.co/4nG8BIEush
— Michael Egorov (@newmichwill) June 12, 2024
“The system showed a fantastic performance. This gave liquidators time to prepare funds and close the hacker’s OTC position. As a result, there are no hacker funds or bad debts left in the system, everything works well,” Egorov wrote in a tweet.
According to CoinGecko, at the time of writing, the price of CRV continues to fall, losing 27.5% in a day. The token is trading at $0.261.
Back in April, a price drop in Curve threatened Michael Egorov’s loan liquidation, but he managed to avoid a negative outcome then. The entrepreneur stated his intention to reduce his risks.