TL;DR
- Michael Egorov, founder of Curve Finance, suffered an $882,000 liquidation in CRV due to a 12% drop in its price in 24 hours.
- However, Egorov himself made known the reasons for this liquidation.
- Despite the drop, CRV has grown 116% in the last month, demonstrating its long-term potential despite market volatility.
Michael Egorov, founder of Curve Finance, was affected by a liquidation, this time for a total of $882,000 in CRV tokens, after the price of the cryptocurrency dropped by 11% in just 24 hours.
The liquidation occurred after Egorov invested $1.2 million in more CRV, buying the tokens at an average price of $1.11, but the value of the cryptocurrency quickly dropped to $0.91, triggering the liquidation process.
Egorov’s clarification of what happened
Egorov explained that the latest liquidation is linked to an attempt to settle a debt related to the hack suffered by the uWu platform. In a message via the X social network, he noted that the liquidation was a measure to recover the debt that Sifu, the founder of uWu, had promised to repay.
Egorov said:
“Here’s how this whole situation played out. I had a position on the UwU platform, which got hacked back in June 2024. Since then, only part of the CRVs were returned.
As time passed, the likelihood of UwU catching the hacker only went down, so their only option was to repurchase CRVs on the market. Meanwhile, I was still able to borrow against these “nonexistent” CRVs on the platform.
Over time, we found an alternative way to settle this matter. veCRV wrappers — such as cvxCRV, sdCRV, and yCRV — are currently available at a substantial discount. Some of these CRVs and veCRV wrappers were purchased directly on the spot market.
This state of things gave me a unique opportunity to take a calculated risk. I borrowed the maximum amount against the absent CRVs on UwU, bought real CRVs, and then used those to purchase the wrappers.
I leveraged the temporary market discount of the wrappers, betting that their prices would recover to their fair value levels in the future. This is a market-driven risk, which makes it more quantifiable.
A noteworthy thing to add is that, when it became possible, UwU operators liquidated those nonexistent CRVs, so they don’t have to repay me that part of the stolen funds. Doing so also ensured that no bad debt remained for the platform.
For Curve Finance, this incident does not mean any ongoing liquidation risks. The June situation is firmly behind us, and the recent events have no particular impact on the platform or its broader user base. In fact, while this situation led me to purchase CRVs, it didn’t result in any CRV sales”.
Despite the recent drop in the price of CRV, which is currently trading near $0.915 per unit, the token has shown strong growth in recent months. In fact, over the last month, it has experienced a 116% increase, demonstrating its long-term potential despite fluctuations in its value. This could be a sign that the cryptocurrency remains an attractive investment for many.
The crypto market is being extremely volatile, and the recent fluctuations in the value of CRV are a result of this instability. The price drop of the token has also been influenced by statements from the Chairman of the U.S. Federal Reserve, Jerome Powell, who mentioned that “Bitcoin cannot be owned” and suggested a decrease in the frequency of interest rate adjustments for 2025, which could be affecting the behavior of digital assets in general
