In a bold move, Michael Egorov, founder of the decentralized finance (DeFi) protocol Cuve, has settled his extensive obligations on the DeFi protocol Aave. Remarkably, he still has a standing debt of $42.7 million across four other DeFi platforms. Egorov used a clever strategy by depositing 68 million CRV, about $35.3 million, as collateral on the Silo lending platform. This maneuver allowed him to borrow Curve’s crvUSD stablecoin, which he then traded for USDT to clear his Aave debt.
This elaborate operation comes in light of Egorov having borrowed 10.8 million crvUSD and still having 253.7 million CRV, around $132 million, pledged as collateral. Meanwhile, Egorov’s remaining debt is splattered among different protocols. This includes $10 million on Inverse, $13.1 million on Fraxlend, $2.5 million in USDC and USDT debt on Cream, and $17.1 million on Silo.
The founder of Curve has previously been under the spotlight, having racked up debt of $100 million over numerous DeFi protocols, backed by a staggering 400 million CRV tokens. This raised eyebrows over the potential effects on the CRV token’s price, which if lowered further could possibly instigate liquidations and jeopardize the entire DeFi market.
Despite this, Egorov has been proactive in decreasing his debt and usage rate. Back in April, he took loans on Aave secured by 288.7 million CRV tokens, about $173 million. The collateral deposited composed 34% of the total CRV token supply.
However, Curve faced a setback in July when a hacking attack exploited a vulnerability leading to significant funds being stolen. This had a notable downward effect on the market causing CRV prices to dip by over 12%. The hack and subsequent price drop sent unsettling vibes throughout the DeFi ecosystem.
In an attempt to deal with his outstanding debt, Egorov sold off 106 million CRV tokens, generating $46 million. This instigated a string of OTC deals where CRV tokens were exchanged for stablecoins. Notable buyers encompassed Wintermute, a crypto trading firm, and prominent individuals Justin Sun and Jeffrey Huang.
Although Curve has enjoyed a steady growth, it now deals with fierce rivalry for market share. Its once impressive growth rate has slowed down. Following the security breach in July, CRV’s value took a hit and saw a 30% decrease but has since stabilized.
With the recent announcement of various collaborations, projects, and debt repayment, a potential upswing in price might be expected, and it’s left to investors to decide whether Curve is a sound investment amidst its ongoing challenges and a volatile DeFi market.
Source: Cryptonews
