- The latest crypto market crash has dealt a new blow to the native token of the Curve Finance ecosystem.
- Curve DAO has experienced months of contrast in broader performance.
- The Curve DAO crash has triggered severe liquidation risks for its founder.
The crypto market has been facing a downward trend in recent weeks, driven by unimpressive performances among leading assets such as Bitcoin (BTC) and Ethereum (ETH).
However, the negative trend peaked over the weekend when most assets plummeted significantly in response to intensifying geopolitical tensions.
As a token highly reactive to changes in market sentiment, CRV, the native token of Curve Finance, has suffered another major blow.
Crypto Crash Plunges CRV to All-Time Low
According to CRV’s trading data on Monday, April 15, the token is wavering at a price low of $0.458, earning the position of one of the biggest losers of the recent market downturn.
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The token, which has seen a steep decline of approximately 31.4% over the last seven days, hit a new record low on Friday, April 12, when it crashed to $0.3316. This marks a 19.75% slide from its previous all-time low of $0.3972.
CRV’s price decline commenced earlier in the month when it suffered a 23% drop from the $0.70 mark, demonstrating its inability to sustain an upward trajectory—this dashed investor optimism for its potential to reclaim its $1 peg.
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The significant price decline rippled through the ecosystem and broader market, particularly impacting the project’s founder.
Curve CEO Risks Wipe-Out
According to EmberCN, the crypto crash-triggered plunge in CRV price has left Curve founder Michael Egorov’s lending protocols positions teetering on the brink.
With lending positions across six DeFi platforms and five addresses, Egorov collateralized 371 million CRV to the tune of $156M to borrow approximately $92.54 million in stablecoins. However, the Curve DAO crash has negatively impacted its health rate to 1.1, from which a further price drop of 10% could trigger liquidation.
The ongoing threat mirrors a similar downturn in August 2023, when CRV declined to $0.4. This resulted in the founder’s sale of over $159.4 million CRV in over-the-counter (OTC) transactions to 33 buyers to avoid a debt liquidation triggered by the drop.
While the Curve CEO maintains that no liquidations have occurred, the lack of further actions may result in severe negative implications should CRV continue to decline.
On the Flipside
- Michael Egorov holds 29% of the entire CRV in circulation.
- Last year, Curve Finance suffered a cyberattack that saw the loss of over $100 million. However, the protocol successfully recovered nearly 75% of its loss.
- The recent crypto market crash resulted in losses of 7% and 10% for Bitcoin and Ethereum, respectively.
Why This Matters
The significant plunge in Curve DAO mirrors the damage of the recent crypto crash, highlighting its vulnerability to negative market trends. Building on CRV’s contrasting performance since the start of the year, the decline charts a rocky path ahead for the token, and any further downturn could jeopardize the financial stability of its founder.
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