Curve Finance Proposes 10% CRV Burn Amid Liquidation Crisis

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CRV Price Crashes 30% As Curve Founder Faces Massive Liquidation

Curve Finance is addressing a recent liquidation crisis that severely impacted its CRV token market. After the liquidation of large loans, the founder of the platform, Michael Egorov, has suggested to burn 10% of the total CRV supply.

This move is intended to prevent the token price from further dropping, which has recently fallen by almost 30%.

Curve Finance Plans 10% CRV Burn

Michael Egorov has suggested that in order to solve the liquidation crisis which has caused a lot of volatility to the market,10% of the total supply of CRV should be burned. This measure is to ensure that the price of CRV token is better controlled and the effects minimized on the users.

Egorov shared this news on X (formerly Twitter) stating that the focus should be on keeping the market’s confidence and stability of the platform.

Egorov has also noted that he has paid off 93% of his debt and intends to pay off the rest soon. He hopes that these steps will help to avoid further harm for users impacted by the situation. To encourage people in the community, the active voters on the burn proposal will be provided with a 3-month APY booster on all the platform’s deposits.

Details of the Michael Egorov Liquidation

The liquidation event started when Egorov’s loans in stablecoins worth $95.7 million, mostly taken as collateral from $141 million in CRV tokens got liquidated due to a drastic drop in the value of the token. The CRV price dropped from $0.35 to a low of $0.23, causing forced liquidations on several DeFi protocols.

This situation generated about $10 million in bad debt and impacted mostly the CRV market on lend. Curve. fi.

Egorov’s positions were divided into five accounts on five different protocols namely Llamalend, UwU Lend, Fraxlend, and others. Some of the liquidations were 20.2 million CRV on UwU Lend and 10.58 million CRV on Fraxlend. According to the data provided by the blockchain analytics firm Arkham, such liquidation might proceed if the CRV price falls even more.

Previous Financial Maneuvers

This is not the first time when Egorov has faced the financial problems connected with his CRV investments. Last year, he was involved in a big exploit on Curve; however, with the help of key players in the DeFi industry, he was saved from liquidation.

This time, to cover the debt, Egorov was sent $6 million of Tether (USDT) by NextGen Venture Partner Christian Seale. This injection of the money enabled him to pay off more than $1 million in bad debt from two of his accounts on Curve’s Llamalend.

Meanwhile, the Curve DAO Token (CRV) price has yet to recover, with the price exchanging hands at $0.2932, a 20.30% decline. Concurrently, the CRV’s market capitalization dipped by 18% to $371,047,573, while the 24-hour trading volume surged by 932% to $763,010,076, with traders accumulating the dip.  

Read Also: Cardano Founder Charles Hoskinson Reveals Next Steps for ADA Governance

The post Curve Finance Proposes 10% CRV Burn Amid Liquidation Crisis appeared first on CoinGape.

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