Curve founder Michael Egorov believes that the $140 million liquidation started with the theft of UwU Lend.

Following a major setback involving the automatic liquidation of a $100 million loan, Curve Finance founder Michael Egorov reiterated the platform's commitment to becoming the safest lending platform. The "vulnerability incident" that occurred on the lending platform UwU Lend, which Egorov used for borrowing, is also considered one of the reasons for the liquidation.

The liquidation of the Curve founder only involves exiting CRV; the emperor is in no hurry at all.

Major Liquidation Triggered by UwU Lend Vulnerability

On Thursday, Curve Finance founder Michael Egorov's $100 million on-chain loan began automatic liquidation as it was collateralized with CRV tokens. This sudden liquidation caused the price of CRV tokens to plummet by as much as 30%, but later recovered. The root cause of this turmoil may be attributed to a vulnerability in UwU Lend.

Egorov's Statement: Chain Reaction Triggered by UwU Lend Vulnerability

According to Egorov, the issue began on April 15, when UwU Lend deployed faulty code for a new sUSDe market. These markets were not isolated, exposing the entire platform to higher risks. The vulnerability led to a hack on UwU Lend, resulting in the theft of CRV tokens. The attacker used these stolen tokens to deposit into LlamaLend on Curve, then vanished with the funds, leaving significant debts in the system.

UwU Lend later inexplicably stated that bad debts from several of its liquidity pools had been compensated.

Continuous Losses at UwU Lend, Impacting CRV Tokens

The consequences of the UwU Lend vulnerability are severe. On Monday, UwU Lend suffered a $20 million loss due to a flash loan attack, and on Thursday, another attack led to a $3.7 million loss. In response, UwU Lend offered a $5 million reward in hopes of catching the attackers. Egorov mentioned in a tweet that bad debts in a specific CRV lending pool reached $10 million, and despite this market being isolated from others, depositors could not withdraw funds until the bad debt issue was resolved. Egorov later stated that these debts have now been repaid.

The Curve Finance team and I have been working to solve the liquidation risk issue which happened today.

Many of you are aware that I had all my loans liquidated. Size of my positions was too large for markets to handle and caused 10M of bad debt. Only CRV market on…

— Michael Egorov (@newmichwill) June 13, 2024

Ensuring User Confidence and Community Support

Egorov reassured users and the community of the platform's commitment to enhancing security. He emphasized that his top priority is to ensure all users can withdraw their deposits seamlessly. "Curve Finance is my top priority, and most importantly, our community," he told CoinDesk in a statement.

Curve Holds a Significant $22 Billion Protocol

As one of the largest crypto protocols, Curve holds a prominent position in the DeFi space with over $20 billion in locked assets. However, the handling of CRV tokens continues to draw criticism, with Michael Egorov's purchase of a luxury home in Australia privately being mocked by other crypto communities.