Curve Impressively Adds 22% As Founder Sells CRV To Repay Aave Loan
August 03 2023 - 10:00PM
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CRV, the governance token of Curve, a decentralized exchange for
stablecoins and a key player in the decentralized finance (DeFi)
landscape, has impressively recovered, adding 22% after sinking to
its August 2023 lows this week. When writing on August 3, CRV is
trading at $0.59, rising double digits after dropping to $0.48 on
August 1 following a damaging hack that saw liquidity
providers in several pools lose funds. Whales Stepping In To
Buy CRV This recovery is attributed primarily to strategic actions
by notable crypto whales who have stepped in to mitigate risks on
DeFi should CRV prices continue to tank. Meanwhile, Michael Egorov,
the founder of Curve and one of the largest CRV holders, has been
actively unloading tokens in the secondary market. Egorov is
selling to whales like Justin Sun, the founder of Tron, and other
venture capitals and decentralized autonomous organizations (DAOs).
The founder held around 292 million CRV and used a big percentage
to back his loans. Related Reading: Shiba Inu’s DeFi Aspirations
May Rattle DOGE’s Market As SHIB Turns To Digital IDs On-chain data
indicates that on August 2, Egorov sold 3.75 million CRV
tokens to Yearn Treasury and another 1.25 million CRV tokens to
Stake DAO Governance via the over-the-counter (OTC) market. Egorov
has, overall, sold 59.5 million CRV to various institutions and
investors, yielding approximately $23.8 million. These OTC sales
are at significant discounts, reflecting the founder’s efforts to
stabilize CRV prices and prevent further contagion. The July 30
hack saw attackers steal funds from several liquidity pools after
exploiting a re-entrancy flaw. JPEG’d, Alchemix, Pendle, and
Metronome pools suffered losses initially estimated at around $70
million. However, other reports suggest that white hat hackers
intervened, reducing the total impact to approximately $50
million. Following this news, CRV prices dropped by over 12%.
Considering Curve’s prominence in DeFi, the hack and price crash
caused reverberation throughout Curve and DeFi, especially in
decentralized money markets. Curve Is A Big Player In DeFi,
Egorov Paying Off Debt Curve manages over $2 billion as total value
locked (TVL), according to DeFiLlama. While there are no
confirmed repercussions on other protocols, attention swung to
Egorov’s $60 million Aave v2 loan, which was primarily backed by
CRV. Should this loan be liquidated, it would likely mean more
selling pressure on CRV, leading to another possible contagion,
especially for other CRV holders with loans across different
protocols. Related Reading: Solana Price Could Surge To $30 Upon
Overcoming This Resistance Looking at on-chain data, Egorov is
taking active steps to reduce the risks brought about by his huge
Aave loan that’s overly collateralized by CRV. Egorov aims to
minimize the potential consequences of forced liquidation through
off-market transactions, where he is selling his CRV at a discount
and simultaneously repaying his loan. This, in turn, appears
to be supporting prices. Feature image from Canva, chart from
TradingView
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