CRV Price Drop Puts Curve Founder Egorov Near Liquidation

The founder of the decentralized exchange Curve, Michael Egorov is close to being liquidated on his large borrowing positions after the price of CRV, the native cryptocurrency of the Curve platform, has dropped massively.

This slump is indicative of wider problems in the cryptocurrency markets, which have experienced significant reductions after the Iran-Israel conflicts. The sources also say that the pledged assets of Egorov have reached a critical level, after which the measures of liquidation are expected in case of no further additional actions are taken.

随着这两天市场下跌，CRV 价格也跌到了 $0.42。Curve 创始人 Michael Egorov 的借贷仓位也又进入红线了。

Michael 目前通过 5 个地址在 6 个借贷平台共计抵押了 3.71 亿枚 CRV ($156M) 借出 $9254 万的稳定币。
因为 CRV 价格下跌，Michael… pic.twitter.com/RxiT6rD7Us

— 余烬 (@EmberCN) April 14, 2024

CRV’s value plummeted to $0.3598, marking a new low after it previously dipped below the former low of $0.3864 recorded in September 2023. The outcome of this fall in price has been felt over Egorov’s collateralized positions across several lending platforms. He initially mortgaged 371 million CRV, valued at approximately $156 million, to secure $92.54 million in stablecoins.  The health rate of these positions is now almost below 1.1.

Details of Curve Founder’s Financial Maneuvers

The holding and debt portfolio management style of Egorov has become a significant element of his liquidity preservation and liquidation avoidance strategy. Egorov conducted an OTC transaction in August of the previous year, in which he sold 159.4 million CRV to 33 different investors and institutions. 

The transaction, as a result, was intended to purchase 63.76 million U.S. stablecoins, which he used as repayment for part of his debt. This proactive move was made when CRV was at approximately $0.4 per token, a tactic that provided a temporary relief from liquidation risk.

All these attempts, however, did not save the situation and the new CRV’s price decrease has brought Egorov’s financial strategies back to the focus of attention. His current holdings with five addresses that keep collateralizing loans on six different lending platforms are now under additional liquidation risks caused by falling CRV prices. In this case, alternatives include the sale of more CRV, using other assets to repay, or holding and risking liquidation if the market does not recover.

Market Dynamics and Decisions

One of the most plausible reasons behind the rapid changes of the price in assets such as CRV is the overall volatility of the crypto market. Curve, as a major participant in the decentralized finance (DeFi) system, is highly reactive to changes of market sentiment and liquidity state. Decisions- making patterns potential for Egorov consist of the careful evaluations whether to sell more assets or to find additional funds to protect himself from potential margin calls.

As the price of CRV shows tentative signs of recovery, trading at about $0.4398 after the recent lows, the market’s direction remains uncertain. Stakeholders in the crypto community and investors in DeFi are closely watching these developments, as they could set precedents for how liquidity crises are handled in the sector amidst ongoing market pressures.

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