In the ever-evolving world of decentralized finance (DeFi), the name Michael Egorov has been synonymous with innovation and groundbreaking initiatives. As the founder of Curve Finance, Egorov has been at the forefront of reshaping the DeFi landscape, offering users new opportunities to maximize their yield and liquidity. However, recent events have taken a dramatic turn, revealing a precarious financial situation for the DeFi luminary.
Defi Lender Michael Egorov Sells CRV Tokens at Discount
In the midst of a DeFi debt crisis, Curve Finance founder Michael Egorov has made an unconventional move to alleviate his financial woes. Egorov is attempting to pay off his mountain of DeFi debts by selling CRV tokens at a discounted rate of $0.40 per token, well below the market price. Nansen research analyst Sandra Leow revealed that Egorov has sold around 50 million CRV tokens to various buyers, with a vesting agreement of three-to-six months or the option to sell if prices reach $0.80.
Controversial Buyers Raise Eyebrows
The list of buyers for Egorov’s CRV tokens includes some controversial figures. Tron founder Justin Sun, who has recently faced legal issues with the United States Securities and Exchange Commission, is among the bigger players involved. Another buyer is tech entrepreneur Jeffrey Huang, better known as “MachiBigBrother,” who faced allegations of embezzling 22,000 Ether last year, valued at over $41 million. Huang denies the claims and has sued his accuser for defamation.
DWF Labs, an investment firm engaged in market making, also acquired some discounted CRV tokens. Furthermore, there are other buyers, including Cream Finance, an established DeFi lending protocol, and “DCFGod,” who is part of a team associated with a nonfungible token (NFT) project. While some of these entities have raised questions about their credibility, Wintermute CEO Evgeny Gaevoy emphasized that Wintermute had not onboarded Egorov as a counterparty.
The DeFi Debt Crisis and Egorov’s Loan Challenges
The DeFi debt crisis began when Michael Egorov used his CRV tokens as collateral to secure a $100 million stablecoin loan. However, the Curve Finance protocol was exploited on July 30, leading to a 30% crash in CRV prices. The drop in CRV prices brought fears of a potential DeFi black swan event, with the possibility of a massive flood of CRV tokens into the market and limited liquidity.
Despite the crisis, Egorov has managed to repay more than $17 million in stablecoin loans, slightly improving the health of the loan, as reported by Debank. However, he still faces a significant debt burden, with $60 million in stablecoins owed to Aave, $12 million on Abracadabra, around $8 million on Inverse, and a $9 million loan on Frax with an alarming 85% interest rate.
Conclusion
Michael Egorov’s decision to sell CRV tokens at a discount highlights the severity of the DeFi debt crisis he faces. The involvement of controversial counterparts in the token sale raises concerns about the potential risks and consequences of these transactions. As the DeFi market remains unpredictable, Egorov will have to navigate carefully to manage his debts and ensure the stability of the Curve Finance protocol. The industry will closely watch his actions and decisions to see how this situation unfolds in the coming months.
