- Curve Finance CEO deposited 38 million CRV tokens into AAVE to mitigate liquidation risk.
- Over 30% of CRV’s circulating supply has been staked to fight the risk of price collapse.
- CRV price declined 22.75% in the past week in response to the SEC’s crackdown on cryptocurrencies.
Curve Finance token has been facing heavy sell-off, prompting CEO Michael Egorov to deposit nearly 32% of Curve Finance (CRV) circulating supply into AAVE. The move comes at a time when DeFi and crypto tokens are battling the Securities & Exchange Commission’s (SEC) crackdown on cryptocurrencies.
Curve Finance battles liquidation risk on AAVE
Curve Finance’s CRV is a utility token for the DeFi protocol and it is used for exchanging stablecoins and other ERC20 tokens.
In its crackdown on crypto exchanges and assets, the SEC listed nearly 63 assets as securities. Curve’s CRV did not make the list and the asset ranks among crypto assets that are not labeled as securities by the SEC. Find the complete list here.
Still, CRV price has been falling rapidly, dropping more than 20% over the last week. To mitigate the liquidation risk, Curve’s CEO deposited 32% of the token’s circulating supply worth $24 million into AAVE. Michael Egorov’s collateral for the AAVE loan is 277 million CRV tokens.
The crypto intelligence tracker Lookonchain identified the wallet tagged as Egorov and shared the findings with 227,500 followers on Twitter.
The founder of https://t.co/KJyxZS1wiW deposited 38M $CRV ($24.5M) into #Aave due to a 16% drop in $CRV price, increasing the health rate to 1.52.
— Lookonchain (@lookonchain) June 10, 2023
He has deposited a total of 290M $CRV ($187M) into #Aave and borrowed $71M stablecoins.https://t.co/WM1nW8JKwU pic.twitter.com/MGvMDmSv5S
Based on the findings, Egorov has bet a third of CRV’s circulating supply to collateralize his large stablecoin loan.
Why Egorov’s move matters?
Egorov’s collateral is massive and a liquidation could disrupt the DeFi ecosystem and trigger a decline in CRV price.
DeFi platforms have built in automated liquidation as a feature and this could result in the collateralized asset losing its value until the market stabilizes.
Therefore, CRV price is at risk of further decline until the health of Egorov’s loan improves and the collateral is no longer at risk of liquidation.
The CRV token’s price is $0.656 at the time of writing. CRV price nosedived by 22.75% since June 5, based on data from TradingView.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms
Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.
Litecoin poised for double-digit decline after breaking ascending trendline
Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC
21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.