That Altcoin Founder Is at Risk of Massive Liquidation: Price Falls!

The price of altcoin Curve DAO (CRV) dropped by up to 35% in a few hours. This sharp decline follows news that Curve founder Michael Egorov may face liquidation. Egorov, one of the important names in the decentralized finance (DeFi) branch, is currently struggling with an unstable trading situation. According to on-chain analysis platform Arkham, Egorov is close to seeing $140 million worth of CRV liquidated. It borrowed approximately $95.7 million worth of stablecoins, primarily crvUSD, against $141 million worth of altcoin CRV, distributed across five accounts under various lending protocols.

Huge liquidation risk for that altcoin

In the last 24 hours, Curve DAO (CRV) price dropped by more than 30%, creating panic in the cryptocurrency markets. The reason behind this sudden decline is that Michael Egorov, the founder of Curve Finance, was exposed to liquidation risk. According to an on-chain analysis platform called Arkham, Egorov is currently facing the liquidation of CRV worth $ 140 million. This stems from Egorov’s stablecoin loans using CRV as collateral in various lending protocols. Analysts predict that these liquidations may occur if the decline in CRV price continues.

It is stated that Egorov has a debt of $50 million on the Llamalend platform and pays $60 million in annual interest. This high interest rate is explained by the scarcity of CRV as a borrowing instrument in Llamalend. Some of Egorov’s debts are also on other DeFi platforms such as UwULend. When the first news came, it was learned that some of Egorov’s positions on the Inverse platform were liquid. Egorov has started repaying stablecoin debt in DOLA to reduce the risk of liquidation and is trying to increase his health score.

The falling price of CRV also affected other major players in the market. For example, crypto whale named 0xF07 was forced to transfer 29.62 million CRV, worth approximately $7.68 million, to Binance due to the liquidation in Fraxlend. However, Ki Young Ju, the founder of CryptoQuant, another onchain analysis platform, observed a significant increase in the CRV balance on the exchanges, reaching an all-time high. It rose 57% in just four hours.

CRV price reaction

The price of CRV decreased from $ 0.35 to $ 0.21 in the first place. However, it later recovered and rose to $0.26. This shows that investors’ interest in CRV continues despite liquidation concerns. Crypto whales also got their share from the decline in CRV. A whale with code 0xF07 was forced to transfer 29.62 million CRV to Binance due to liquidation on Fraxlend.

Egorov’s liquidation risk is considered a valuable development in the DeFi segment. This incident once again reveals the risks of DeFi protocols such as lending and collateral use. Fluctuations in the CRV price show how volatile and unpredictable the cryptocurrency markets are.