Michael Egorov Faces Liquidation of 350 Million CRV Loan, Leading to 40% Price Dump

Michael Egorov, founder of Curve Finance, is once again facing liquidation risks. His loan, backed by 350 million CRV tokens (equivalent to $122.5 million), is being liquidated, resulting in a significant price drop for CRV.

Michael Egorov Faces Liquidation of 350 Million CRV Loan, Leading to 40% Price Dump

Update as of June 13, 2024:

Michael Egorov's CRV-collateralized loan positions began to be liquidated on the morning of June 13, causing the CRV token price to drop by nearly 40%.

Original Article:

In the past two days, the crypto market has witnessed a significant sell-off, leading to the liquidation of over $260 million in leveraged positions. This selling pressure is not only from users but also from U.S. Bitcoin spot ETFs, which recorded outflows totaling $200 million, led by Grayscale's GBTC.

Both long positions on centralized exchanges (CEX) and positions on decentralized exchanges (DEX) and lending platforms are at risk of liquidation.

Michael Egorov, the founder of Curve, often finds himself in the spotlight during such market downturns due to the risk of liquidation on his CRV-backed stablecoin loans.

In mid-April, Egorov faced the risk of liquidating 371 million CRV tokens, equivalent to $156 million. The current potential liquidation involves 350 million CRV tokens (equivalent to $122.5 million).

According to DeFi analyst "USD Denominated," Egorov holds eight CRV-collateralized wallets across four lending platforms: Fraxlend, Silo, LlamaLend, and Inverse. He has collateralized a total of 351.2 million CRV tokens, equivalent to $122.5 million, to borrow $90.8 million in stablecoins. The first liquidation trigger will occur when CRV's price hits $0.342.

With CRV trading around $0.36 at the time of writing, a further 5% drop without additional collateral deposits will trigger the first liquidation, involving 50.2 million CRV. If CRV's price continues to drop to $0.295, all 350 million CRV ($122.5 million) will be liquidated.

Adding to the pressure, Michael Patryn, co-founder of the now-defunct Canadian crypto exchange QuadrigaCX and known as "0xSifu," withdrew millions from the LlamaLend CRV/crvUSD pool, pushing the crvUSD borrowing rate to 68%. This action stems from a security breach on UwU Lend, a DeFi protocol founded by Patryn, resulting in significant asset losses.

UwU Lend, a DeFi protocol operating as a liquidity market and supporting algorithmic stablecoin lending, suffered a security breach two days ago, losing a total of $23 million in crypto assets, including:

• 481,357 Wrapped Ether (WETH) worth $1.7 million
• 17,629 Wrapped Bitcoin (WBTC) worth $1.19 million
• 499,254 bLUSD worth $592.6k
• 233,819 crvUSD stablecoins from Curve Finance worth $233.5k
• 1.39 million sDAI tokens from Spark Protocol worth $1.51 million
• 25.35 million CRV tokens worth $9.38 million
• 3.52 million DAI stablecoins
• 4.22 million USDT stablecoins from Tether
• 486,455 sUSDe tokens, a high-yield staking certificate from Ethena, worth around $525k