Michael Egorov, founder of Curve Finance, got liquidated again on one of his recent CRV positions. The liquidation comes just days after Egorov made a new CRV purchase to support the price of the sliding token.
One of the addresses of Michael Egorov got liquidated after the crypto market had another daily drawdown. The wallet, labeled to belong to the founder of Curve (CRV), was liquidated for 918.83K CRV, valued at above $898K.
The liquidation comes after the latest $1.2M buyback from Egorov on December 17. Egorov re-bought at $1.11, after a temporary drawdown for CRV. The repurchase was the first foray of Egorov back into CRV, after suffering a liquidation for $140M on June 13.
Egorov warned that the recent position did not actually affect real CRV, but was a technicality to cover the losses from the UwU Lend hack in June. The transaction was used as an on-chain receipt for a loss that Egorov already suffered in the hack. He stated the liquidation was a testimony of the expected repayment from Sifu, the founder of UwU lend. Despite the warning, news of the liquidation had a contagion effect, deepening the CRV losses and leading to additional liquidations.
Curve offers soft liquidations, which try to protect the collateral. There are also hard liquidations, as well as self-caused liquidations. Self-liquidation is available for those with positions already in soft liquidation and with diminishing health. The recent drawdown of CRV may have triggered some users to close their positions in the current price range.
The project’s founder continues to be an active DeFi user, with swaps between CRV and stablecoins. Transactions from Egorov’s wallet also show outflows of small amounts of stablecoins into DeFi pools and protocols.
CRV sinks from yearly peak despite the buyback
Egorov rebuys CRV as a tool to prop up sentiment and acquire more tokens at a lower price range. CRV can then be used as collateral to borrow stablecoins for other DeFi tasks. This approach works during favorable marker conditions, but can lead to deep liquidations.
Despite the liquidation, CRV still trades near its higher range for 2024. The token peaked at $1.25, later sliding to $0.94 as the entire market had a drawdown. CRV is still down from its 2021-2022 market peak during the previous bull cycle, where the underlying asset traded above $5.
Liquidations affected other CRV borrowers, leading to a drawdown of the token’s price. CRV is potentially revisiting lower positions, where active traders may buy again.
CRV open interest fell in the past month, from a peak above $260M down to $179M. Long positions are above 60%, still showing some confidence of a price recovery. However, a drawdown can attack and liquidate those positions.
Curve Finance is also diminished compared to its influence in the previous DeFi boom. The platform’s liquidations relegated it to a less influential position, displaced by new protocols. Despite this, Curve is an essential part of current DeFi tasks, offering access to liquidity with its specific level of liquidation risk.
Curve value locked recovers slightly
Curve is still important for the current DeFi space, as it is one of the main markets for Ethena’s sUSDe. The decentralized protocol carries more than 95% of all sUSDe trading activity in four different asset pairs.
For now, Curve is still in position 20 based on total value locked. The protocol carries around $2.37B, down from a peak of over $23B during the height of the 2021 bull market. Curve has lost the initial hype after multiple liquidations, and was deeply affected by the 2022 failure of Terra (LUNA).
The protocol is now more conservative with its liquidity pools, and is trying to rebuild its reputation. The hub is still available on 19 chains, though its Ethereum version remains the most active. The protocol claims a 3.48% share of the crypto market, with more than $386M in daily volumes.
Curve is now ranked in position 20 based on the available value locked. The protocol still has legacy influence, with 88,982 holders. The token is also involved in Aave’s lending pools, which hold 3.6M tokens.
A Step-By-Step System To Launching Your Web3 Career and Landing High-Paying Crypto Jobs in 90 Days.
