Michael Egorov, the founder of decentralized finance (DeFi) protocol Curve Finance, has announced that he has repaid 93% of a $10 million debt incurred.
Michael Egorov, the founder of decentralized finance (DeFi) protocol Curve Finance, has announced that he has repaid 93% of a $10 million debt incurred during a soft liquidation earlier in the day. The liquidation was triggered as the price of Curve’s native token, CRV, plummeted over 28% following a hacking incident.
“Size of my positions was too large for markets to handle and caused $10 million of bad debt,” Egorov explained. “I have already repaid 93%, and I intend to repay the rest very shortly.”
On June 13, Curve Finance’s soft liquidation mechanism was put to a real-world test during the hacking attempt. While the mechanism managed the situation effectively, the CRV token's price took a significant hit. According to blockchain analytics firm Arkham Intelligence, Egorov faced $140 million in liquidations due to borrowing $95.7 million in stablecoins, mostly crvUSD, against $141 million in CRV across five accounts on five different protocols.
In response to the crisis, Egorov has proposed burning 10% of the outstanding CRV tokens, valued at $37 million at the time of publication, to help stabilize the token's price and return it to pre-incident levels. “As a reward, active voters will earn a 3-month APY booster on all platform deposits,” he added.
This is not the first time Egorov's financial maneuvers have significantly impacted Curve Finance. In August 2023, the protocol suffered a $62 million exploit, which also resulted in bad debt linked to Egorov’s $100 million borrowings. Despite the turmoil, Egorov managed to repay the funds eventually.
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