<\/p>\n
Egorov\u2019s CRV holdings have dropped to $34M after previously taking out nearly $100M in stablecoins loans backed by $141M worth of CRV.<\/p>\n
A sharp decline in the price of CRV has caused Michael Egorov, the founder of Curve Finance, to suffer tens of millions of dollars in liquidations after borrowing nearly $100 million in stablecoins backed by Curve\u2019s governance token.<\/p>\n
On June 13, Lookonchain, an on-chain analytics team, flagged<\/a> that Egorov\u2019s collateral across four lending protocols had been reduced to just $33.9 million worth of CRV backing $20.6 million in debts after being forced into liquidation.<\/p>\n According to Arkham Intelligence, an on-chain intelligence firm, Egorov previously used $141 million worth of CRV to back $95.7 million<\/a> worth of stablecoin loans using the DeFi lending protocols Inverse, UwU Lend, Fraxlend, LlamaLend, and Aave. <\/p>\n On June 12, Arkham noted that $50 million worth of Egorov\u2019s loans were taken out in the form of crvUSD from Llamalend, exhausting the protocol\u2019s crvUSD pool and resulting in annual interest of roughly 120%. Arkham warned that a 10% drop in the price of CRV would place Egorov\u2019s positions in liquidation.<\/p>\n The price of CRV, Curve\u2019s governance token, has crashed by more than 20% in the past 24 hours, according to CoinGecko, triggering many of Egorov\u2019s positions to enter liquidation. CRV is also down 40% in the past seven days.<\/p>\n Egorov also suffered a $5 million<\/a> liquidation on UwU Lend<\/a>, while Curve\u2019s founder has made repayments<\/a> on Inverse to stave off further losses.<\/p>\n The current state of Egorov\u2019s holdings suggests that around 78% of his holdings have been liquidated to pay down his debts so far.<\/p>\n Curve Lend, a lending protocol launched by Curve Finance, has also been severely hit by the recent CRV drawdown.<\/p>\n On June 13, Saint Rat, a pseudonymous Curve contributor, tweeted<\/a> that the protocol has incurred $11.5 million worth of bad debt, adding that the debt would be cleared if the price of CRV rises to $0.33. CRV last changed hands for roughly $0.28.<\/p>\n The latest episode is not the first time that Egorov has stared down the barrel at hefty liquidations. Last year, $60 million worth of loans borrowed from Aave by Egorov threatened to leave the protocol with bad debt in the event of liquidation.<\/p>\n In June, Gauntlet, a risk management firm, recommended<\/a> that Aave freeze its v2 CRV market to prevent the token from backing new loans and to minimize risks posed to the protocol. A proposal to freeze the CRV market passed in August 2023.<\/p>\nBad debt<\/h2>\n