Curve founder Michael Egorov has successfully paid off the $10 million debt resulting from a hacking attempt on June 13, which led to soft liquidations.
Egorov admitted on social media that his positions were too large for the market to handle, causing the $10 million debt. He announced that he had already settled 93% of the amount owed.
The hack on June 13 triggered soft liquidations of Egorov’s positions due to a sudden increase in borrowing costs. At the peak of the crisis, Egorov faced $140 million in liquidations from $95 million in stablecoin debt, along with a $60 million annual fee to maintain his positions.
Additionally, Curve’s token, CRV, experienced a 28% drop in value during the incident. To stabilize the token’s price, Egorov suggested burning 10% of CRV tokens worth $37 million. He also offered higher APY to voters as an incentive for the proposal.
The recent crisis at Curve has raised concerns about the risks associated with Egorov’s debt positions, as highlighted in a 2023 Delphi Digital report. The report warned that Egorov’s $100 million in loans across DeFi protocols could potentially lead to a collapse in DeFi.
Despite the challenges faced by the Curve platform, Egorov explained that LLAMMA’s soft liquidation mechanism worked as intended. This mechanism gradually liquidates a borrower’s funds as their “health” as a debtor declines. Once the borrower’s health reaches 0%, a hard liquidation of their assets takes place.
In other news, zero-knowledge proofs are showing promise beyond the realm of crypto, from voting to finance.