DeFi
This Ethereum-Based DeFi Token Dropped 30% – What Happened?
In the early days of Asian trade, CurveThe CRV/USD token saw a 30% decline, driven by the automatic liquidation of some loan positions linked to the protocol’s founder, Michael Egorov.
What happened: This liquidation triggered a flurry of selling activity, significantly impacting the token’s market value, Coindesk reported.
Blockchain Analysis Companies Lookonchain And Arkham identified that Egorov addresses have accumulated nearly $100 million in stablecoin loans, primarily crvUSD, backed by $140 million in CRV collateral.
Egorov’s lending activities span multiple platforms, including Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend, with CRV tokens serving as collateral.
Over the past 24 hours, total holdings in these tracked wallets have decreased by 50%.
Egorov has been proactive in managing the risks associated with these loans.
Data shows that at the start of Asian hours, he repaid several loans on Reverse And LamaLend using FRAX/USD, DOLA/USD and CRV tokens.
In addition, several transactions between CRV and Attached USDT/USD was recorded, indicating strategic moves to stabilize its positions.
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Why is this important: The liquidation of such large stakes has put pressure on other decentralized finance (DeFi) protocols, as CRV is commonly used as a trading pair and stabilizing asset in various trading pools within the ecosystem.
A single Frax Lend address saw $3.3 million in positions liquidated due to CRV price declines.
This incident marks the second time Egorov’s borrowing activities have disrupted the crypto market.
In 2023, a security breach in several Curve loan pools caused CRV prices to suddenly drop, putting more than $100 million in collateral at risk.
During this crisis, prominent DeFi figures like Tron Founder of TRON/USD Justin Sun stepped in, providing liquidity and purchasing millions of CRV at a discounted rate to mitigate widespread potential financial damage in the crypto sphere.
At the time of writing, CRV was trading around $0.28, down 20% in the last 24 hours.
And after: The next Benzinga The future of digital assets The November 19 event will provide a timely platform to discuss these developments and their impacts on the digital asset landscape.
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