The crypto market failed to sustain the bullish momentum that was sparked by the softer-than-expected inflation numbers unveiled yesterday. Bitcoin and Ether slid down to $67k and $3.5k respectively. However, there was another token that was heavily bleeding at press time.
DeFi protocol Curve’s native CRV token dropped by more than 25% in just a span of few hours to script a new all-time low at $0.2202. There was some respite noted after the brutal crash, but it wasn’t significant enough to make amends.
The token’s price crash has been associated with the automatic liquidation of loan positions tied to the protocol’s founder Michael Egorov. As of press time, his entire 9-figure lending position was liquidated across 5 protocols. On-chain analytics platform Arkham Intel pointed out,
"Two of his accounts incurred together over a million dollars of bad debt on Curve’s Llamalend, which Egorov has cleared after receiving $6M USDT from @Christianeth in the past hour."
Lookonchian pointed out that the executive had loaned around $100 million worth of stablecoins - that were mostly crvUSD - against $140 million CRV collateral.
He had borrowed via multiple addresses on different protocols, including UwU Lend, Fraxlend, Inverse, and LlamaLend.
The cumulative holdings of the executive across wallets, as tracked by Debank, show that their value has dropped by more than 56% to $15.9 million.
Egorov’s transaction history depicted his attempts to manage debt positions and alleviate risk. He’d initiated swaps, repayments, and withdrawals to and from the aforementioned DeFi protocols.
Other market participants were seen bearing the brunt of Egorov’s liquidations and CRV’s price drop. According to Lookonchain,
“As the price of CRV drops, someone got liquidated for 10.58M CRV ($3.3M) on Fraxlend just now.”
Well, this is not the first time Egorov has been in such a position. In July-August last year, he sold more than 100 million CRV to slash liquidation risks tied to his outstanding debts.
Community members reacted to this with exclamations like “We’re living in a simulation,” “history repeats itself,” and “déjà vu” on social media platforms. They also simultaneously pointed out how this whole liquidation saga has coincidentally unfurled on the same day as the Tapioca launch.
The last time, several users including investor Jeffrey Huang,aka Machi Big Brother, DWF Labs, and Justin Sun bought discounted CRV tokens to prevent the situation from worsening.
