OTC Fundraising and Repayment Redux: Curve Founder CRV Faces Liquidation Crisis, Lending Health Ratio Plummets to 1.1
As the cryptocurrency market experiences a recent downturn, the health of borrowers on various lending platforms is also at risk, including Curve founder Michael Egorov. Analyst Yu Yan discovered that Egorov’s lending positions, worth over $90 million, are once again on the verge of liquidation, with some positions having a health ratio as low as 1.1.
With Bitcoin’s price dropping to $60,000, various competing coins have also seen a decline of 10% to 30% within two days. Among them, Curve (CRV) experienced a maximum decline of 39% within three days, narrowing down to around 26% at the time of writing.
According to Yu Yan, due to the rapid decline in CRV price, Michael Egorov’s lending positions have once again become precarious. With the CRV price reaching $0.42, Egorov’s health ratio across multiple platforms has dropped to dangerous levels of around 1.1. He has collateralized a total of 371 million CRV tokens using five different addresses on six lending platforms, borrowing a total of $92.54 million in stablecoins.
ChainNews has also compiled Michael Egorov’s borrowing status on various protocols. Despite Egorov’s efforts to supplement collateral or repay loans, there are still three platforms with health ratios below 1.2. In the current highly volatile market, this poses a significant risk. If faced with another 20% decline, it could lead to large-scale liquidation of assets worth millions of dollars.
Yu Yan expresses concern and emphasizes that Egorov will need to make a choice: either sell CRV through OTC to repay the loans as before, or partially convert the previously borrowed stablecoins to repay the loans. He adds that “or else, if there is no action taken, the market will not continue to decline.”
Last August, Curve Finance suffered a security breach resulting in a loss of over $70 million and a 24% decline in its token CRV within two days. This almost led to the consecutive liquidation of Michael Egorov’s positions on various lending protocols, causing a severe crisis in the entire DeFi ecosystem.
At that time, Egorov had a debt of up to $110 million, collateralizing over 427.5 million CRV tokens, which accounted for nearly half of the circulating supply. It was only in the following days that Egorov sought out 33 institutions and individual investors for over-the-counter (OTC) sales of a large amount of CRV tokens to gradually restore his financial situation.
CRV, Curve Finance (CRV), Michael Egorov, Yu Yan, lending, liquidation
