Crypto Research Firm Uncovers Curve Finance Founder’s Crypto Loans
Crypto research firm Delphi Digital recently tweeted a thread that revealed the loans taken by Curve Finance founder Michael Egorov, which are backed by 47% of the circulating supply of Curve DAO (CRV). According to the firm, Egorov has around $100 million in loans across various lending protocols, with a total of 427.5 million CRV as collateral.
On Aave, Egorov has 305 million CRV backing a 63.2-million Tether (USDT) loan. If the CRV token drops 36%, the loan could be liquidated at a rate of $0.3767, which is lower than its current trading price of $0.5975.
On Frax Finance, Egorov has 59 million CRV backing a debt of 15.8 million Frax (FRAX). Fraxlend’s time-weighted variable interest rate makes the loan more risky, as the interest rate can double every 12 hours and reach up to 10,000% in just 3.5 days, leading to liquidation regardless of the price of the CRV token.
The crypto world is still reeling from the $47-million hack Curve Finance suffered recently, and now holders of the decentralized finance (DeFi) protocol’s token are speculating on the potential of a massive dump.
Egorov’s Moves to Lower Debt and Utilization Rate
In an effort to reduce the debt and utilization rate, Egorov has paid out a total of 4 million FRAX in the last 24 hours. Despite this, users have been quick to withdraw liquidity immediately after the payment. To combat this, Egorov launched a Curve pool as an incentive for users to provide liquidity to the lending market. This move was successful, as the pool gained $2 million in liquidity within 4 hours and decreased the utilization rate from 100% to 89%.
The crypto community has had mixed reactions to the situation. Some have compared it to FTX founder Sam Bankman-Fried using FTX Token (FTT) as collateral, while others have expressed concern that it could be a “black eye for the industry” that could set back DeFi progress by a few years. Cointelegraph reached out to Egorov but did not receive an immediate response.
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