zycrypto.com
Curve Finance founder Michael Egorov has bought himself some breathing space after some backers, including Tron founder Justin Sun, stepped in to help after the decentralized protocol suffered a $47 million hack over the weekend.
Concerns Over Egorov’s Huge Loan Position
Justin Sun and others have lined up to weather a bad debt crisis that could have potentially triggered a decentralized finance (DeFi) implosion.
To recap: The founder of Curve Finance Michael Egorov took around $100 million in loans across various lending protocols, which were backed by 47% of the circulating supply of Curve DAO ($CRV).
The revelation about Egorov’s teetering financial situation came as Curve Finance was reeling from a hack. The DeFi exchange suffered an exploit on Sunday due to a vulnerability related to the Vyper contract-oriented programming language. Attackers siphoned cryptocurrencies worth $47 million, including 7.19 million $CRV tokens, worth approximately $4.52 million. This put considerable downward pressure on the price of $CRV, putting Egorov’s multi-million-dollar lending position at a greater risk of liquidation.
2/ On @AaveAave, Egorov has $305m $CRV backing a 63.2m $USDT loan.
— Delphi Digital (@Delphi_Digital) August 1, 2023
At a liquidation threshold of 55%, his position is eligible for liquidation at 0.3767 $CRV/$USDT.
This would only require a ~33% drop in $CRV price for this to occur. He is also paying ~4% APY for this loan. pic.twitter.com/fbTgsF3xEg
The principal value of Egorov’s loan on Aave has, however, decreased from $63.3 million to $54.1 million thanks to a slew of wealthy participants. One is Justin Sun of Tron who acquired roughly 5 million $CRV from Egorov for $2.3 million in an over-the-counter deal.
Sun noted in a Tuesday tweet that he was “excited to assist Curve”. “As steadfast partners, we remain committed to providing support whenever needed.”
Data from PeckShield indicates that other participants took the chance to snap up $CRV tokens for cheap through OTC transactions after Sun’s purchases. Notably, Egorov sold 3.75 million $CRV to NFT owner Jeffrey Huang aka Machi Big Brother, and later 2.5 million $CRV tokens to Cream Finance.
On-chain data tracking website Lookonchain notes that Egorov has sold a total of 39.25 million $CRV for $0.4 per token and received around 15.8 million $USDT in return.