- The Curve DAO token has suffered another sharp decline.
- Curve founder Michael Egorov is facing heightened liquidation risk.
- Curve DAO has suffered major price declines this year.
Curve DAO (CRV), the native token of the Curve Finance ecosystem, has experienced a turbulent year, consistently hitting new lows in response to negative market trends. On April 15, CRV plummeted sharply to a new all-time low, wreaking havoc on the market positions of holders, including its founder, Michael Egorov’s lending positions.
Once again sensitive to adverse market conditions, CRV has suffered another significant blow, extending its misfortune to its founder.
CRV Crash Liquidates Founder
In the early hours of Thursday, June 13, 2024, Curve DAO experienced a severe price crash, plunging to a new all-time low. Between 1:00 AM UTC and 4:00 AM UTC, the token’s trading value dropped sharply from $0.356 to an unhealthy $0.235, a loss of approximately 34%.
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The drastic decline in CRV’s value immediately impacted its founder’s lending positions, which were already left in a precarious state following the token’s crash earlier in April. Egorov, who had borrowed $95.7 million in stablecoins, primarily crvUSD, across five different stocks, including LlamaLend, Inverse, Fraxlend, and UwU Lend, used 141 million CRV tokens as collateral. This resulted in a total of 100 million CRV tokens liquidation across the founder’s lending positions, totaling nearly $27 million.
Assessing the situation, Ethereum core developer Econoarr emphasized that the Curve founder did not suffer significant losses due to the CRV liquidation, instead gaining nearly $100 million from his $140 million CRV position while avoiding community backlash that would have resulted from selling on the open market.
Blockchain intelligence platform SoSo, however, stated that while Egorov’s actions did not exert direct selling pressure, they potentially harmed the interests of the token’s investors, which may further damage the token’s already shaky market standing and reputation.
CRV’s Turbulent Year
Despite a recent rebound from its low of $0.235 to the current value of $0.286, CRV’s trading price at press time marks a substantial 98% decline from its peak value.
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Additionally, CRV has suffered a significant 39% decline over the past seven days, underscoring its vulnerability amid the ongoing market downturn. This drop has pushed CRV down to the 199th position by global market capitalization, a stark contrast from its year-start position when the token traded between $0.6 and $0.8.
The broader underperformance has dashed the initially heightened investor optimism for the token to reclaim a $1 dollar peg and its once stable path, and whether a more optimistic trajectory lies ahead remains to be seen.
On the Flipside
- Prior to the latest crash, Curve DAO’s previous all-time low was $0.3316.
- In September 2023, Curve founder Michael Egorov faced a similar liquidation risk following a $100 million hack on the ecosystem.
- Curve Founder Egorov has successfully restored the health rate of some of his positions above 1 by implementing measures to mitigate liquidation risks.
Why This Matters
The umpressive performance of the Curve DAO token, coupled with the heightening liquidation risk for its founder, charts an uncertain future for the ecosystem. Should the health rate of Egorov’s positions weaken further, a dump of his holdings by the protocols may exert significant selling pressure, potentially leading to further price drops.
Read this article to find out more about Curve DAO’s broader underperformance:
Curve DAO Struggles to Regain Balance Despite Market Rebound
Here’s how OKX is resolving the recent cyberattack and fund loss for some of its users:
OKX Exchange Targets Resolution Post Hack on Users’ Accounts
