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Curve founder dumps $19 million in CRV to repay debts; What’s next?

Curve founder dumps $19 million in CRV to repay debts; What's next?

Michael Egorov, the founder of Curve (CRV), sold another 34 million CRV ($19.72M, at press time) on the night of Thursday, August 3, as the token prices dropped 20% in the last seven days. 

The executive has sold a total of 106 million CRV for $42.41 million, since the “Reentrancy Hack” that affected Curve, and currently has $65.34 million in debt, according to Lookonchain data.

The Curve Protocol was a victim of a hack on July 30, in which around $52 million in crypto assets were drained from the platform’s liquidity pools (LPs), as per PeckShield, causing a liquidity crisis in Curve’s ecosystem. The event also affected CRV prices and caused multiple imbalances in different markets — affecting investors’ confidence.

In order to mitigate the liquidity crisis, Michael Egorov took loans from different crypto-lending platforms to replenish Curve’s LPs, using CRV as collateral. He still has 346.93 million CRV ($220.4 million) in five platforms, that risk to be liquidated as the supplied token’s prices continue to drop.

Now, as the founder tries to protect his own position, Egorov is selling CRV tokens in OTC deals to over 15 different institutions at a discount. He already repaid $42.41 million of his debts so far, but there is still a lot to go.

The most current OTC deal, of 34 million CRV for around $19 million, was used to repay 7.52 MIM on Abracadabra and 6.1 USDT on Aave (AAVE).

This is Egorov’s current position, according to Lookonchain:

  • 251.2 million CRV ($144.26 million) collateral on Aave for 43.16 million USDT borrowed;
  • 38.6 million CRV ($22.17 million) collateral on Fraxlend for 9.2 million FRAX borrowed;
  • 29.13 million CRV ($16.73 million) collateral on Inverse for 7.7 million DOLA borrowed;
  • 25.65 million CRV ($14.73 million) collateral on Abracadabra for 4.53 million MIM borrowed;
  • 2.35 million CRV ($1.35 million) collateral on Silo for 740 thousand XAI borrowed.
Debts of Michael Egorov CRV
Debts of Michael Egorov by Lookonchain

What is next for CRV price?

Curve DAO token is priced at $0.58 by press time, losing over 20% of its value in the last seven days, dipping from $0.73 after the “reentrancy hack.” The local bottom was registered on Tuesday, August 1, at $0.50/crv.

Curve DAO (CRV) price chart by Finbold
Curve DAO (CRV) price chart by Finbold

The crypto asset currently has around $123 million exchange volume, which is overcome by Ergov’s exposure on Aave alone. This demonstrates the high-risk Curve is facing in the cryptocurrency market, as a liquidation from his position could deeply impact CRV prices by triggering another liquidity crisis, with further drops in price.

Data from Defillama also shows that the Curve Protocol has lost over 36% of its Total Value Locked (TVL) in the last 30 days. This Protocol was once known as the TVL leader in the whole DeFi ecosystem, providing solid stablecoin liquidity to the industry.

Curve had $3.266 billion before the “Reentrancy Hack”, but now accounts for $2.343 billion, as investors withdrew close to one billion in stacked assets from Curve’s liquidity pools, loans, and protocol.

Curve Finance (CRV) TVL by Defillama
Curve Finance (CRV) TVL by Defillama

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