Michael Egorov, the mastermind behind the innovative decentralized finance (DeFi) platform Curve Finance, has successfully managed to settle 93% of the $10 million in bad debt incurred from a recent soft liquidation event.
In a candid statement, Egorov admitted, “My positions were too substantial for the market to handle, resulting in $10 million in bad debt. I have already repaid 93% of it and plan to settle the remainder shortly.”
On June 13, Curve Finance’s soft liquidation mechanism underwent a rigorous real-world test during a hacking attempt. However, the price of its native CRV token took a nosedive of more than 28% amidst the turmoil. According to blockchain analytics firm Arkham Intelligence, Egorov found himself grappling with $140 million in liquidations after borrowing a staggering $95.7 million in stablecoins (primarily crvUSD) against $141 million in CRV across five accounts on five different protocols.
At the peak of the hack, Egorov was facing a daunting $60 million in annualized fees to sustain his borrowings. Arkham elucidated, “Egorov has proposed burning 10% of the outstanding CRV tokens, valued at $37 million currently, to stabilize the token’s price back to its pre-incident levels. In return, active voters will receive a 3-month APY booster on all platform deposits,” the blockchain executive revealed.
This isn’t the first incident where Egorov’s CRV holdings and borrowings have impacted the protocol during times of crisis. In August 2023, Curve was hit by an exploit amounting to $62 million, which also led to bad debt from Egorov’s $100 million borrowings on Curve at that time. The blockchain executive, however, managed to repay the funds eventually.
As per the latest data from blockchain analytics platform DeFiLlama, Curve currently ranks as the 19th largest DeFi protocol with over $2 billion worth of crypto assets locked within its smart contracts.
Related: Curve Finance grants a developer $250K for uncovering a re-entrancy vulnerability.
Curve founder settles 93 of 10M debt from liquidation by repaying