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After a week that saw the price of Curve\u2019s CRV token fall 20%, a series of over-the-counter deals originally made to bail out Curve founder Michael Egorov\u2019s lending positions now face scrutiny.\u00a0<\/p>\n
On July 31, Curve suffered a $70 million exploit<\/a> that sent the price of CRV tumbling from $0.73 to as low as $0.50.<\/p>\n While the majority of the funds were later recovered or seized by whitehat hackers<\/a>, one pool in particular \u2014\u00a0CRV\/ETH \u2014 remained drained. This pool was an important source of on-chain liquidity for CRV<\/a>, and without it, lending markets that might need to liquidate CRV collateral on delinquent positions ran the risk of incurring bad debt.\u00a0<\/p>\n This was not a theoretical risk. At the time of the attack, Egorov held upwards of $110 million in stablecoin<\/a> loans from various lending platforms, largely using CRV collateral. As the price fell, many of those positions appeared to be at risk of liquidation.\u00a0<\/p>\n To save his loans \u2014 and potentially prevent cascading liquidations across the DeFi space\u00a0\u2014 Egorov entered into a series of over-the-counter (OTC) deals with over a dozen counterparties, selling large tranches of CRV for stablecoins to pay down his debts.\u00a0<\/p>\n Read more:<\/strong> Curve\u2019s Egorov turns to notable counterparties to bail out his DeFi positions<\/a><\/p>\n While the terms of the deal were not formally disclosed, multiple individuals who claimed to have been approached wrote publicly that the tokens were sold for $0.40 per CRV (well below market rate at the time) with a six-month lockup. However, the lockups did not appear to be enforced legally or via smart contract.\u00a0<\/p>\n In a statement to Blockworks, Egorov<\/a> confirmed that there are no negative effects for buyers who break the handshake agreement, but that he \u201cthinks they would\u201d keep their word regarding the six-month lockups.\u00a0<\/p>\n Observers have already noted that some of the parties have transferred their tokens to centralized exchanges \u2014 often a sign that they intend to sell.\u00a0<\/p>\n Andrei Grachev, head of DFW Labs, one of the entities that has transferred their OTC\u2019d tokens to an exchange, denied these accusations on Twitter, claiming that the move was for \u201ctrading needs\u201d and not to sell.\u00a0<\/p>\n As Egorov pointed out to Blockworks, other users have indirectly committed to the six-month lockup by vote-escrowing their CRV. Locking tokens in the vote escrow contracts issues veCRV, which allows users to dictate the flow of further CRV rewards to specific liquidity pools.\u00a0<\/p>\n Despite the price dip, Egorov\u2019s current positions look healthy<\/a>. On Aave, he has a $14.8 million loan secured by $55.8 million in CRV collateral, and across a number of protocols an additional $27 million in debt secured by $68 million in collateral.\u00a0<\/p>\n CRV is currently trading around $0.45, down 6% on the day.<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" After a week that saw the price of Curve\u2019s CRV token fall 20%, a series of over-the-counter deals originally made to bail out Curve founder Michael Egorov\u2019s lending positions now face scrutiny.\u00a0 On July 31, Curve suffered a $70 million exploit that sent the price of CRV tumbling from $0.73 to as low as $0.50. […]<\/p>\n","protected":false},"author":2,"featured_media":140830,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-140829","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/140829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=140829"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/140829\/revisions"}],"predecessor-version":[{"id":147203,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/140829\/revisions\/147203"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/140830"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=140829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=140829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=140829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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