CRV FUD Eased as Curve Finance Founder Avoids Liquidation
• Curve Finance [CRV] recently suffered a breach resulting in losses of around $70 million.
• The prospect of Curve’s CEO getting liquidated stirred FUD, however recent OTC transactions to major cryptocurrency players helped curb fears.
• Michael Egorov repaid roughly $6.6 million from the Frax pool, which alleviated some of the concerns surrounding liquidation.
Curve Finance Breach
Curve Finance [CRV] recently suffered a devastating breach resulting in losses of around $70 million. This caused shockwaves through the cryptocurrency industry and DeFi realm alike, stirring up fear that the founder Michael Egorov would get liquidated due to holding a substantial 47% of circulating supply CRV tokens in lending protocols.
OTC Transactions
In order to avoid this potential liquidity crisis, Michael resorted to OTC (over-the-counter) transactions with major cryptocurrency players. OTC transactions involve privately selling or buying a substantial amount of cryptocurrency directly between parties outside traditional exchange platforms, allowing for negotiated terms such as pricing and lockup periods.
Frax Pool Worry
Among these platforms, Frax emerged as a source of heightened concern due to its high APY (annual percentage yield) rate at 85%, capable of doubling every 12 hours under full utilization and reaching 10,000% within four days. To alleviate these apprehensions, Michael repaid roughly $6.6 million specifically within this pool.
Price Recovery
The news appears to have had some positive effect on CRV’s price as it has recovered since then; however the number of token holders continues to decline as at August 2nd 2023 when this article was published.
Conclusion
The recent breach and subsequent repayment activity by Curve’s founder have been encouraging developments for the platform and its native token holders – though further improvements are needed if CRV is to meet its previous highs again anytime soon