Curve Founder\'s $95.7M Crypto Borrowing Crisis Sparks $22.6M Liquidation Frenzy Amid Market Plunge

Curve is a popular crypto DeFi protocol specializing in stablecoin trading with low fees and efficient liquidity pools. It's known for optimizing swaps between

Curve founder Michael Egorov’s massive stablecoin borrowing spree has sparked a rapid liquidation event, with over $22.6 million in CRV collateral liquidated amid a sharp decline in the token’s value.

According to data from Parsec, the liquidation began around 16:00 UTC and proceeded at a brisk pace. In total, over 90K CRV was liquidated over four hours. Of this amount, 50K CRV was liquidated in the last hour alone.

At the time of writing, CRV is trading at $0.273, down 23% in the last 24 hours. The token’s sharp decline is likely due to a broader sell-off in the cryptocurrency market, which saw Bitcoin and Ether both drop by around 5%.

Egorov’s large stablecoin borrows were highlighted earlier on June 12 by Arkham. The platform noted that the Curve founder had borrowed a total of $95.7 million in crvUSD, a stablecoin derivative pegged to the CRV token and used for obtaining leverage in DeFi protocols.

The crvUSD borrows were used as collateral to obtain leverage, with Egorov’s positions valued at $141 million across five protocols. However, with CRV’s price now dropping by 12%, those positions are at risk of being liquidated.

Indeed, the rapid liquidation of Egorov’s CRV collateral suggests that his positions were being liquidated en masse. This is further evidenced by the high annual percentage yield on Egorov’s crvUSD borrows, which reached as high as 120% on Llamalend.

The high APY is a result of there being little crvUSD left to borrow against CRV on Llamalend. In fact, three of Egorov’s accounts are said to comprise over 90% of the borrowed crvUSD on the protocol.

Neither the Curve protocol founder nor the Curve Finance team have yet commented publicly on the latest dump in the CRV token’s price.

However, Curve Finance’s founder did address the liquidation issues and risks earlier on June 12, albeit without mentioning the latest price dump. The discussion was prompted by a question from a Crypto X user two days ago.

“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…”

News source：https://www.kdj.com/cryptocurrencies-news/articles/curve-founder-m-crypto-borrowing-crisis-sparks-m-liquidation-frenzy-market-plunge.html

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