CRV Founder’s Debt Woes Deepen Amid Price Plummet
CoinChapter.com has reported that Curve Finance is in trouble as founder Michael Egorov faces potential liquidation risks due to a sharp drop in CRV prices.
According to CoinStats, the price of the CRV token plummeted by more than 25% in just 24 hours, currently sitting at $0.262. This sudden decline has put Egorov’s on-chain loans in jeopardy, resulting in partial liquidations and raising concerns about the stability of Curve Finance.
Egorov, who has borrowed nearly $95.7 million across various DeFi platforms, used around 141 million CRV tokens as collateral. His loans come from platforms like Inverse, UwU Lend, Fraxlend, and Curve’s LlamaLend.
The rapid drop in CRV prices triggered automatic liquidations, starting with Egorov’s positions on Inverse. Despite his attempts to repay some borrowed stablecoin DOLA, his position remains precarious, with a health rate dangerously close to the liquidation threshold.
Arkham Finance had warned that the situation could worsen if CRV prices dropped another 10%, which became a reality when the token’s value plunged by nearly 39% to a daily low of around $0.22 on June 13. This led to the liquidation of approximately $23 million worth of CRV collateral within hours, highlighting the financial strain and risk management challenges Egorov is facing.
Despite the turmoil, there was a glimmer of hope for CRV as Binance announced its integration of the token into the Arbitrum One and Optimism networks. This move aimed to improve liquidity and transaction efficiency for Curve Finance, potentially attracting more users.
Following this news, CRV prices started to recover, although the token was still down by 19% for the day. If the downward trend continues, CRV prices could drop to the support level near $0.275. Failure to hold this level could see prices fall further to the 0.786 FIB support level around $0.24.
However, if Curve Finance can overcome Egorov’s liquidation issues, CRV prices may rise to the resistance level near $0.335. Breaking through this resistance could propel the token to the $0.38 resistance level before any potential retracement.
The relative strength index for CRV currently stands at 24.19 on the daily charts, indicating oversold conditions. While this typically suggests a bullish reversal, it may take some time before CRV experiences any significant bullish movement.