The token CRV issued by the decentralized trading protocol Curve was shorted by giant whales earlier, with a minimum of $0.4, but since then there has been a short squeeze, with a maximum of $0.736. A large number of positions of the giant whale in Aave were also liquidated, even leaving bad debts of 2.64 million CRV.
(Previous story: Defi Survival War "Curve attacker has lent 92 million CRV! Aave lending rate soared by nearly 1,500% )
(Background Supplement: Giant Whale Smash Curve! Lent 30 million pieces $CRV sold short, the tokens have plummeted by 22% )
The dynamic zone reported yesterday (22) that a giant whale (0x57) lent 30 million CRV from the Defi protocol Aave and transferred it to the OKX exchange in three parts. . According to data from Binance, the price of CRV reached as low as $0.4 at around 18:45 yesterday, and fell by 25% in one afternoon.
But just when investors were worried about whether they would continue to smash the market, there was a big short squeeze, and the big short-selling whales suffered heavy losses and were liquidated!
After the founder of Curve.fi reported buying 20 million CRV as collateral in the early hours of yesterday morning, the price of CRV rebounded slowly, and at around 01:45 this morning, there was a wave of rapid rise, and the highest price of CRV was piled up It hit $0.736, surging nearly 46% in six hours.
Before the deadline, it was reported at US$0.654. The health index on the Curve protocol, which had dropped rapidly, and a large number of CRVs were facing liquidation, finally returned to normal.
Aave: The CRV position of the giant whale was liquidated on a large scale, but 2.64 million CRV bad debts were left
In the case of the rapid rise of CRV, the giant whales that were aggressively shorted yesterday are being liquidated on a large scale.
According to Aave’s tweet early this morning (23rd), the giant whale’s mortgage loan position has been liquidated, but there are still bad debts of 2.64 million CRV (about 1.7 million US dollars at current price).
(It is reported that within a week, the whale lent a total of 92 million CRV and mortgaged 63.6 million USDC )
Aave further explained that "the liquidation was successful." Most of the large CRV loans accumulated by this giant whale have been liquidated through the agreement process, but unfortunately they are not fully covered so that the excess debt occurs (<0.1%), but emphasizes that there will be follow-up Complementary mechanism for processing.
A number of mechanisms are used in building the Aave ecosystem, including security modules, ecosystem reserves, and DAO libraries. In the coming days, we believe that the Aave community and its contributors will initiate discussions about this event. Community contributor @monetsupply also opened a discussion on the Governance Forum about reviewing long-term asset risk in the Aave V2 market.
1/6 We want to address the cycle of liquidations that occurred in the CRV pool on the Aave Protocol today. The liquidations were successful (and worked as designed), but unfortunately, the size of the position left some excess debt within the protocol.
— Aave (@AaveAave) November 22, 2022
Short squeeze or intentional?
Currently, according to Debank data , the assets in the wallet once reached USD 41.8 million yesterday evening, but now only USD 896,000 is left, rapidly evaporating more than 97%. In this regard, many netizens said that they were refreshed to see that the giant whale tried to short CRV, an important contributor in the Defi field, but was liquidated in large quantities.
However, some netizens speculated that since it is unclear whether the giant whale has hedged on the centralized exchange or other platforms, it is suspected that the whole short squeeze market was directed and acted by him. After lent out a large amount of CRV to smash the market and create panic, he took profits and then bought together with the crowd to raise the price, and he had no plan to return the position in Aave.
Regardless of the dynamic zone, we still need to remind that the current CRV fluctuates violently, and please pay attention to related risks before investing.
