Michael Egorov, the founder of Curve Finance, faced liquidation earlier today after the CRV token dropped to an all-time low of $0.219.

$27 million liquidated

On-chain analyst EmberCN reported that Egorov’s lending positions were mostly liquidated, amounting to around 100 million CRV, valued at $27 million. However, he still retains 39.35 million CRV, securing $5.4 million in stablecoins on a lending platform.

These remaining assets are not at immediate risk of liquidation, as the loan health rate has improved.

Blockchain intelligence platform SoSo Value indicated that Egorov’s situation led to widespread CRV liquidations across various platforms. Although his actions did not create direct selling pressure, he reportedly profited quickly in another manner, potentially disadvantaging lenders and former CRV investors.

SoSo Value added:

“Curve, as an established DeFi project, is known for its quality and long-term profitability. However, it remains to be seen if this incident will impact Curve’s standing and reduce community cohesion.”

Previously, Arkham Intelligence warned that Egorov’s CRV positions worth $140 million across five protocols were at risk of liquidation if the digital asset’s price dropped by 10%. The company explained:

“$50 million of Egorov’s crvUSD borrows are on Llamalend, which currently costs him around 120% APY. This is because there is almost no remaining crvUSD available for borrowing against CRV on Llamalend. Three of Egorov’s accounts already constitute over 90% of the borrowed crvUSD on the protocol.”

This is not the first time Egorov’s substantial borrowing on Curve has disrupted the market. Last year, a hacking event led to sharp declines in CRV price, prompting several DeFi protocols to prohibit additional CRV borrowing due to the contagion risk from Egorov’s actions.

Curve’s soft liquidation

Amid the market turmoil, Egorov praised Curve Finance’s soft liquidation mechanism on June 12 for effectively managing a real-world test during the recent UwU lending platform hack.

According to LLAMMA documentation, new loans deposit collateral into multiple bands across the automated market maker (AMM). Unlike traditional liquidation with a single price, LLAMMA has several liquidation ranges and continuously liquidates collateral if necessary.

Egorov stated:

“The system showed fantastic performance. This gave time for liquidators to prepare funds and OTC-liquidate the hacker’s position. As a result, the system has no hacker’s funds left, no bad debts, and everything operates well.”