Curve Impressively Adds 22% As Founder Sells CRV To Repay Aave Loan
CRV, the governance token of Curve, a decentralized exchange for stablecoins and a key player in the decentralized finance (DeFi) landscape, has impressively recovered, adding 22% after sinking to its August 2023 lows this week.
When writing on August 3, CRV is trading at $0.59, rising double digits after dropping to $0.48 on August 1 following a damaging hack that saw liquidity providers in several pools lose funds.
Whales Stepping In To Buy CRV
This recovery is attributed primarily to strategic actions by notable crypto whales who have stepped in to mitigate risks on DeFi should CRV prices continue to tank. Meanwhile, Michael Egorov, the founder of Curve and one of the largest CRV holders, has been actively unloading tokens in the secondary market.
Egorov is selling to whales like Justin Sun, the founder of Tron, and other venture capitals and decentralized autonomous organizations (DAOs). The founder held around 292 million CRV and used a big percentage to back his loans.
On-chain data indicates that on August 2, Egorov sold 3.75 million CRV tokens to Yearn Treasury and another 1.25 million CRV tokens to Stake DAO Governance via the over-the-counter (OTC) market.
Egorov has, overall, sold 59.5 million CRV to various institutions and investors, yielding approximately $23.8 million. These OTC sales are at significant discounts, reflecting the founder’s efforts to stabilize CRV prices and prevent further contagion.
The July 30 hack saw attackers steal funds from several liquidity pools after exploiting a re-entrancy flaw. JPEG’d, Alchemix, Pendle, and Metronome pools suffered losses initially estimated at around $70 million. However, other reports suggest that white hat hackers intervened, reducing the total impact to approximately $50 million.
Following this news, CRV prices dropped by over 12%. Considering Curve’s prominence in DeFi, the hack and price crash caused reverberation throughout Curve and DeFi, especially in decentralized money markets.
Curve Is A Big Player In DeFi, Egorov Paying Off Debt
Curve manages over $2 billion as total value locked (TVL), according to DeFiLlama. While there are no confirmed repercussions on other protocols, attention swung to Egorov’s $60 million Aave v2 loan, which was primarily backed by CRV. Should this loan be liquidated, it would likely mean more selling pressure on CRV, leading to another possible contagion, especially for other CRV holders with loans across different protocols.
Looking at on-chain data, Egorov is taking active steps to reduce the risks brought about by his huge Aave loan that’s overly collateralized by CRV. Egorov aims to minimize the potential consequences of forced liquidation through off-market transactions, where he is selling his CRV at a discount and simultaneously repaying his loan. This, in turn, appears to be supporting prices.
Feature image from Canva, chart from TradingView
Source: NewsBTC.com
The post Curve Impressively Adds 22% As Founder Sells CRV To Repay Aave Loan appeared first on Crypto Breaking News.
Read more: https://www.cryptobreaking.com/curve-impressively-adds-22-as-founder-sells-crv-to-repay-aave-loan/
Text source: Crypto Breaking News
