Nexo

Join the hunt for $12,000,000+ in NEXO Tokens!

Learn More

Curve Finance and Owner's $100M Debt: Catastrophe or Slight Inconvenience?

Michael Egorov has around $100 million in loans across various lending protocols backed by 47% of the circulating supply of Curve DAO tokens.

Curve Finance and Owner's $100M Debt: Catastrophe or Slight Inconvenience?

Share this article

Curve Finance founder Michael Egorov is facing a complex financial situation as he grapples with roughly $100 million in debt backed by 47% of the circulating supply of Curve DAO (CRV). This revelation comes just as the DeFi protocol is recovering from a $47 million hack.

According to crypto research firm Delphi Digital, Egorov has loans across various lending protocols, with 305 million CRV backing a 63.2 million Tether loan on Aave, and 59 million CRV backing a 15.8 million Frax debt on Frax Finance. The research firm also notes specific risk thresholds that could potentially trigger liquidation.

In response to this, Egorov has taken steps to lower the debt by paying a total of 4 million FRAX within a 24-hour period. Further, to incentivize liquidity, he deployed a Curve pool that attracted $2 million in liquidity and decreased the utilization rate from 100% to 89% within hours:

These position sizes that are at risk of liquidation are in the 8 figure range. Thus, the $CRV price could potentially tank to extreme lows, causing knock-on effects over a large part of the DeFi ecosystem.”

Egorov has acted swiftly to reduce the debt and utilization rate by paying 4 million FRAX in the last 24 hours. Yet, the DeFi community reacts just as fast, removing liquidity whenever Egorov pays.

Share this article

Loading...