Michael Egorov, the mastermind behind the decentralized finance (DeFi) platform Curve Finance, proudly announced that he has successfully repaid 93% of the $10 million bad debt incurred from a soft liquidation event earlier in the day.
In a candid admission, Egorov acknowledged, “The size of my positions was too substantial for the markets to manage, resulting in $10 million of bad debt. I have already settled 93% of it and plan to clear the remainder shortly.”
On June 13, Curve Finance’s soft liquidation mechanism proved its mettle during a recent hacking attempt, albeit causing a sharp 28% drop in the value of its native CRV token. According to the insights provided by blockchain analytics firm Arkham Intelligence, Egorov found himself facing $140 million in liquidations after borrowing $95.7 million in stablecoins, mainly crvUSD, against $141 million in CRV across five accounts on five different protocols.
At the height of the crisis, Egorov was confronted with the daunting prospect of shelling out $60 million in annualized fees to sustain his borrowings. Arkham clarified the situation, stating:
Egorov has put forth a suggestion to burn 10% of the outstanding CRV tokens, valued at $37 million at the time, in order to stabilize the token’s price back to its pre-incident levels. “As an incentive, Active voters will receive a 3-month APY booster on all platform deposits,” remarked the blockchain executive.
This is not the first instance where Egorov’s CRV holdings and borrowings have had an impact on the protocol during turbulent times. In August 2023, Curve fell victim to an exploit totaling $62 million, resulting in bad debt from Egorov’s $100 million borrowings on the platform at that time. Egorov eventually repaid the funds.
As per the latest data from blockchain analytics platform DeFiLlama, Curve currently stands as the 19th largest DeFi protocol with over $2 billion worth of crypto assets locked in its contracts.
Related:
Curve Finance grants a developer $250K for identifying a re-entrancy vulnerability.