In the context of a sharp decline in the crypto market, the founder of Curve became the center of attention once again when facing the risk of liquidation of up to 150 million USD CRV.
Curve's founder is at risk of liquidating $150 million in CRV mortgages
As Coin68 reported, the crypto market over the past 2 days has witnessed serious declines, leading to 2 consecutive days of liquidation of more than 800 million USD .
Not only are Longing orders on centralized exchanges (CEX) being scanned en masse, but the risk of "account burning" also comes to orders on DEXs and lending platforms.
The most obvious risk of liquidation is with project founder Michael Egorov's CRV mortgage positions to borrow stablecoins.
Recall that in August 2023, Michael Egorov's CRV mortgages worth hundreds of dollars were close to the liquidation threshold, forcing this person to sell CRV OTC to have money to "rescue the order".
This incident caused a stir in the community for a while, making the DeFi founder the subject of strong criticism.
From August last year until now, the crypto market has increased sharply, pushing CRV up, so it seems that the community has forgotten Michael Egorov's position.
However, with the current sharp drop, CRV price is currently fluctuating around 0.43 USD, recording a decrease of 43% in the past 30 days.
4h chart of the CRV/ USDT pair on Binance at 12:20 PM on April 14, 2024
So the Curve founder's borrowing position became the focus of community attention once again.
According to analysts, Michael Egorov currently owns 5 CRV mortgage wallet addresses on 6 lending platforms. A total of 371 million CRV Token , equivalent to 156 million USD , were pledged to borrow 92.5 million USD of stablecoins.
Curve founder Michael Egorov also faced liquidation of his lending positions as CRV fell to $0.42. Michael mortgaged a total of 371m CRV (approximately $156 million) through 5 addresses on 6 lending platforms to borrow $92.54m in stablecoins. The health rate has dropped to around…
— Wu Blockchain (@WuBlockchain) April 14, 2024
Currently, the health index of these orders has fallen to 1.1 - an extremely risky level. If CRV price drops another 10% without adding additional collateral, these positions will be liquidated.
Or to put it more briefly, the founder of Curve will be liquidated almost all of 156 million USD if the price of CRV drops to around 0.37 USD .
It should also be noted that CRV Token sold OTC to whales are around 0.4 USD . That is, if CRV drops to 0.4 USD, it is likely that the above whales will sell a large amount of CRV to the market to avoid Capital loss.
The Dump from large orders will push Curve price further down, increasing the risk of falling to around 0.37 USD.
So given the current situation, how should Michael Egorov act?
1. Continue selling CRV OTC as the previous solution, to have more money to deposit to save the order.
2. Or if the founder has a lot of idle assets, he can deposit available stablecoin to save the order. But it also requires nearly a hundred million "idle" USD.
3. Sit still and do nothing and hope CRV doesn't drop to liquidation level.
Coin68 compiled
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