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Another OTC fundraising for repayments? Curve founder CRV faces liquidity crisis again, borrowing health ratio drops to as low as 1.1

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Another OTC fundraising for repayments? Curve founder CRV faces liquidity crisis again, borrowing health ratio drops to as low as 1.1

In light of the recent market correction in the cryptocurrency market, the health of borrowers on various lending platforms has been thrown into crisis, with Curve founder Michael Egorov among them. On-chain analyst Yu Jin discovered that Egorov's lending position, valued at over $90 million, is once again on the brink of liquidation, with some positions' health as low as 1.1.

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CRV Liquidation Crisis Resurfaces?

As the price of Bitcoin briefly dropped to $60,000, various altcoins also experienced a 10% to 30% decline within two days. Among them, Curve CRV saw a maximum drop of 39% in three days, but as of the time of writing, the decline has narrowed to around 26%.

Source: Binance

According to reports, due to the rapid drop in CRV price, Curve founder Michael Egorov's leveraged positions have once again entered a risky state:

With the CRV price at $0.42, Egorov's health ratios across multiple platforms have dropped to dangerous levels of around 1.1.

Egorov has collateralized a total of 371 million CRV tokens across 6 lending platforms through 5 addresses and borrowed a total of $92.54 million in stablecoins.

Overview of Michael Egorov's Lending Situation

Details of Michael Egorov's lending situation across various protocols have been compiled. Even after Egorov's actions to supplement collateral or repay loans following the recent concerns, there are still 3 platforms where the health ratio remains below 1.2, posing significant risks in the current highly volatile market. A further 20% decline could trigger large-scale liquidations worth tens of millions of dollars.

Source: DeBank

Expressing concerns, it is emphasized that Egorov will need to make a choice:

Either sell CRV OTC to repay loans as before, or partially convert previously borrowed stablecoins to repay the loans.

It is also added, "Or take no action for now and gamble that the market will not continue to decline."

Review of Previous Liquidation Crisis, Egorov's OTC Fundraising

In August last year, Curve Finance was hit by a vulnerability exploit, resulting in losses exceeding $70 million and a 24% drop in the token $CRV within two days, almost leading to consecutive liquidation of Michael Egorov's positions across various lending protocols, causing a severe crisis that affected the entire DeFi ecosystem.

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At that time, Egorov had outstanding debts of up to $110 million, collateralized with over 427.5 million CRV tokens, accounting for nearly half of the circulating supply.

In the following days, Egorov sought out 33 institutions and individual investors, conducting large OTC sales of CRV tokens to gradually repay his debts, gradually restoring his financial situation.