As geopolitical tensions despatched crypto markets right into a tailspin final weekend, the Curve Finance neighborhood was once more pressured to think about the dangers posed by founder Michael Egorov.
Egorov got here near liquidation on his extremely leveraged CRV positions, which whole over $150 million, with CRV dipping beneath $0.38 on Saturday, in keeping with knowledge from CoinMarketCap.
On-chain analyst EmberCN identifies 5 addresses which have present open positions of $93 million price of stablecoins borrowed towards 372 million CRV (price $162 million at time of writing).
It was additionally famous that the 20 million CRV place on Silo did briefly fall beneath its liquidation threshold, nonetheless, no liquidator took the chance to grab the collateral.
Egorov’s response, in a nod to the oft-repeated idea that he by no means plans to repay his loans after having purchased two Melbourne mansions, was to launch a brand new pool on Curve with the goal of evening-out rates of interest on three crvUSD lending swimming pools.
Learn extra: Curve Finance ‘gentleman’s settlement’ expires, counterparties dump CRV
The Egorov saga is a sword of Damocles over the Curve neighborhood
If positions are allowed to hit their liquidation thresholds, the CRV collateral would start to be bought off by liquidation bots. These gross sales would trigger an additional drop within the CRV worth, with extra liquidations to observe; a state of affairs generally known as a liquidation cascade.
Such an occasion could be disastrous for particular person Curve holders and the various tasks concerned within the so-called ‘Curve Wars’ — the label given to protocols that goal to build up mass quantities of CRV to be able to achieve voting energy on Curve.
Egorov’s positions have been in peril a number of occasions up to now, most notably after the hack of Curve itself. The final time he got here near liquidation, the fallout despatched the value of CRV down rapidly, and, in a bid to pay down his money owed, Egorov bought a complete of just about 40 million CRV at $0.40 every.
The over-the-counter (OTC) offers have been made with an understanding that the tokens wouldn’t be bought for six months.
In early February, the handshake association between the bailout suppliers expired, with some 8.75 million CRV seemingly dumped instantly, for round 17% revenue.