Reviewing the Curve crisis: DeFi controlled by a few, no different from traditional finance: greed and hypocrisy become the norm.

Foreign media CoinDesk recently commented on the crisis of Curve Finance CRV, pointing out the predicament of Curve founder Michael Egorov raising money from all corners, the assistance from industry giants, and the indifference of all parties to Michael Egorov's excessive collateralization of CRV before the incident. These situations reveal that the survival of DeFi lies in the hands of a few, and it is no different from traditional finance, where greed and hypocrisy have become the norm.

DeFi is Dead

DeFi is Dead is the headline of CoinDesk's "DeFi Died and We Didn’t Even Notice".

Although mainstream protocols in DeFi, including lending protocols without intermediaries and credit scoring, as well as permissionless coin exchanges, continue to operate technically, CoinDesk's Deputy Editor Daniel Kuhn believes that DeFi is dead.

The dreams of DeFi, which once included decentralized finance escaping the clutches of power and offering a range of financial products from basic to complex and easily accessible, no longer exist.

And the one to blame for this situation is not the U.S. Securities and Exchange Commission (SEC), but DeFi itself.

Recalling the Curve Finance Crisis

Daniel Kuhn believes that while the vulnerability of Curve CRV led to a major attack, it was not catastrophic:

• 7/31｜Curve vulnerability affecting ecosystem-related protocols: Curve suffers tens of millions of dollars in loss attack, related protocols and risks affected at a glance

The key lies in Curve founder Michael Egorov borrowing over $100 million by mortgaging CRV, leading CRV into a death spiral of liquidation crisis:

• 8/1｜Curve CRV founder's liquidation crisis: Sun Yuchen's financial aid, high reward CRV pool, repayment to Aave/FRAX/MIM in succession

• 8/1｜Curve founder's borrowing coefficient rebounds: Brother Ma Li Cheng buys $1.5 million worth of CRV at a discount, locks up 3.75 million CRV

On August 1st, Curve founder Michael Egorov continuously repaid debts on Abracadabra and FRAX protocols to retrieve CRV, receiving multiple injections of millions of USDT, including $2 million from Sun Yuchen.

While the CRV price received temporary support, and although Michael Egorov seems to have done nothing wrong, Daniel Kuhn points out several issues.

What's Wrong with DeFi?

He points out that Peter Thiel, co-founder of Paypal and early investor in Facebook, could also mortgage shares in banks for large amounts of cash. In the DeFi field advocating for permissionless actions, Curve founder Michael Egorov could have done the same.

However, there are a few points worth considering:

Why can Michael Egorov hold nearly half of the CRV supply?

Why can DeFi founders control nearly half of the tokens at one point?

Why did no one intervene in this matter, leading to a threat to important protocols in DeFi?

Why do lending protocols like Aave not limit the percentage of token supply that can be mortgaged?

Daniel Kuhn raises these questions.

Why didn't the founder big shots and wealthy developers act sooner?

Cryptocurrency risk assessment institution Gauntlet previously attempted to freeze the CRV market on Aave V2, but the vote did not pass.

Three well-known crypto leaders ParaFi, Framework, and 1kx filed a lawsuit against Michael Egorov after he bought a mansion at the end of May.

Review: Stablecoin trading hub Curve founder accused of fraud by major investor, using investor funds to mine CRV

But the investors don't really care about Michael Egorov's over-mortgaging of CRV; they are trying to gain more equity through litigation.

With this, Daniel Kuhn concludes.

DeFi is No Different from Traditional Finance: Rife with Greed, Hypocrisy

Daniel Kuhn believes this is a microcosm of DeFi:

Although DeFi is based on many new technologies and open-source protocols, it faces the same problems of hypocrisy and rampant greed as traditional finance, as noted by Paul Dylan-Ennis, a professor at University College Dublin, who said: "DeFi is not building democracy, it just needs to function."

Michael Egorov's plight from couch cushions to raising funds everywhere, as well as the assistance of industry giants, reveals that DeFi's survival is in the hands of a few, indicating the true situation of DeFi being dead for years.