CRV (Curve DAO Token) is one of the popular cryptocurrencies in the field of decentralized finance (DeFi). Recently, however, CRV has encountered several issues that may affect its value and stability.
One of the key factors affecting CRV is the fact that the founder of Curve, Michael Egorov, has a very large loan on the Curve and Aave platforms.
This loan is secured by $427.5 million CRV, or about 47% of the total circulating supply of CRV. With the price of CRV decreasing by 10% in the past 24 hours, Curve’s health is at great risk.
Not only that, but Egorov also has another loan on Frax Finance with a smaller amount of CRV but potentially causing a big impact on the CRV price. Fraxlend’s Time-Weighted Variable Interest Rate is generating interest that doubles every 12 hours, and this could push APY up to a maximum of almost 10,000% in just 3.5 days. This loan is causing concern to the community because, with this interest rate, it can lead to the loan being liquidated regardless of the CRV price.
In an effort to reduce the risk of his loans, Egorov tried to reduce the debt. Egorov has implemented a new pool and gauge on Curve with 100k $CRV rewards. However, users are in a hurry to withdraw their funds from the platform because of concerns about something amiss.
The volatile situation of CRV also has a big impact on the price and the DeFi ecosystem. With Egorov’s large loans facing liquidation, the CRV price could drop to extremely low levels, and this could spread to the entire DeFi ecosystem.
The user community and investors are waiting to see if Egorov can solve the problems related to the loan.
