Over the weekend, as the crypto market took a collective nosedive, Michael Egorov, the founder of the decentralized finance protocol Curve (CRV), found himself once more teetering on the brink of liquidation on his substantial DeFi loan.
Curve Founder Loan In Danger
Since Saturday, Bitcoin has seen a 10% decrease in its price, while altcoins such as CRV experienced even steeper declines, plummeting by 30% from $0.58 to $0.43 during the same period. At its lowest point on Saturday, the token nearly hit $0.38, coming dangerously close to Egorov’s $0.37 liquidation threshold.
EmberCN tweeted on Saturday, translated from Chinese, stating, “The lending health rate of multiple positions has dropped to around 1.1 (if the CRV price continues to drop by 10% and there is no margin call or repayment, liquidation will begin).”
Colin Wu elaborated that Egorov has provided 371 million CRV tokens (approximately $156 million) to borrow $92.5 million in stablecoins, utilizing 5 addresses across 6 different DeFi lending platforms. To shield himself from liquidation, he needs to either bolster his collateral with more CRV or reduce his debt by paying off a portion of it.
In the past, Egorov has sought assistance from various crypto heavyweights to raise funds and safeguard his position. Back in October, Tron founder Justin Sun acquired 5 million CRV from Egorov at $0.40 per token. Through a series of additional private transactions, Egorov managed to secure $15.8 million in over-the-counter (OTC) deals, albeit at the expense of 39.2 million CRV.
Over-the-counter sales serve as a valuable tool for whales facing potential slippage or market impact, especially when dealing with altcoins with limited liquidity. According to CoinMarketCap data, CRV has only seen $85 million in trading volume over the past 24 hours, with a market capitalization just above $500 million.
Given these circumstances, Egorov and others are keen on protecting his loan. If his CRV were to be liquidated, the token’s price would likely plummet to unprecedented lows, posing significant risks.
Liquidations Across Crypto
Had Egorov faced liquidation, he wouldn’t have been the only one in trouble. Coinglass data reveals that cryptocurrency traders collectively suffered over $1.5 billion in liquidations just between April 13 and 14. Even short traders aiming to profit from the market crash ended up losing $273 million due to the intermittent volatility.
DeFi loans were similarly affected. Wu pointed out that decentralized exchanges experienced $120 million in liquidations during that period.
