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Trading volumes associated with $CRV, the governance token of Curve, a stablecoin decentralized exchange (DEX), is down 97% barely two months after it was hacked in late July 2023. According to Kaiko, $CRV’s trading volume in centralized exchanges, especially Binance, where the token is actively traded, fell from nearly $300 million in late July to $7 million as of September 12.
Trackers show that $CRV is available for trading in multiple centralized and decentralized exchanges, including Binance, Uniswap, and Curve. However, considering the popularity and liquidity standing of Binance, most $CRV trading was concentrated on the world’s popular crypto exchange.
To illustrate, Binance’s share of $CRV trading is about 20% when writing, while Bitbox is next with a dominance of around 7%.
Curve’s TVL, Price, And Trading Volumes Collapse
In crypto, a drop in trading volume often indicates waning interest in a digital asset or general caution practiced by investors. With falling volume, the asset’s liquidity takes a hit as traders or investors opt out, even liquidating the coin as they choose stability and refuge. Sometimes, they can adopt a wait-and-see approach, evaluating how the token will react in light of changing market conditions.
According to DeFiLlama, Curve has a total value locked (TVL) of approximately $2.17 billion, down from $3.25 billion when the protocol was hacked. The decline in TVL and trading volumes comes amid the general lull in the decentralized finance (DeFi) scene.
The drop in $CRV valuation and trading volumes was worsened by the July exploit, which saw the protocol lose over $50 million worth of assets. Although Curve recovered most of those funds, the effect of the exploit called into question the general state of security.
The Hack And Erogov’s $CRV Disposal
In the July hack, malicious actors exploited various Curve stablecoin pools using older versions of Vyper, a programming language used to create smart contracts on Ethereum. All Curve’s pools are automated, and this feature allowed hackers to drain multiple pools through a re-entrancy attack.
$CRV reacted to this hack by dropping, falling sharply on July 30 from around $0.74 to $0.48. It has since exceeded halved, crashing to $0.40, a new 2023 low.
During this time, Curve’s CEO, Michael Egorov, had to sell $CRV holdings he had used to back his loans via over-the-counter (OTC) to entities and individuals such as Justin Sun when prices started falling. Egorov had taken out loans on Aave and Frax Finance secured by $CRV.