Curve founder returns 1.3 million USDT to Aave to curb liquidation risk

Quick Take

  • A wallet linked to Michael Egorov, the founder of Curve Finance, has returned 1.35 million USDT to Aave, decreasing its on-chain debt.
  • This action was taken to mitigate the potential liquidation risk for his loan position on Aave amidst a downturn of the CRV token.

A wallet tied to Curve Finance founder Michael Egorov has returned 1.35 million USD Tether (USDT) to Aave, reducing its on-chain debt.

Egorov has proactively reduced the debt to mitigate liquidation risk associated with his loan position on the decentralized lending platform, Aave. This comes amidst a drastic downturn of Curve’s CRV token, which has witnessed a 24% weekly decline and currently trades at $0.57, per CoinGecko.

Egorov’s loan position, backed by 288.7 million Curve DAO (CRV) tokens, valued at $167 million, has about 62 million USDT borrowed against it, with a health factor of 1.55 — down from over 1.6 yesterday.

This position has attracted attention from the DeFi community due to its size. It comprises over 30% of the total CRV token supply, an alarmingly high stake that, in light of the recent price drop, has sparked concerns of substantial selling pressure on CRV tokens and an increased risk of platform liquidation.


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In a bold response to potential liquidation, Gauntlet, a firm specializing in DeFi risk management, has proposed to the Aave community. They suggest that all CRV tokens on the version 2 platform should be frozen and that the loan-to-value ratio for CRV should be adjusted to zero. This strategy is designed to reduce the risk of accruing bad debt that could arise from Egorov’s loan.

This freeze would necessitate a migration of Egorov’s loan position from Aave’s second version to its third, which is perceived as being better equipped to handle risk management.

Echoing a cautionary sentiment, Egorov commented on the Aave position to The Block, saying, “It’s better to be a bit more careful with this position on Aave. Even if [the] proposal gets rejected, it's better for me to act as if it was executed."

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Vishal Chawla is The Block’s crypto ecosystems editor and has spent over six years covering tech protocols, cybersecurity, artificial intelligence and cloud computing. Vishal likes to delve deep into blockchain intricacies to ensure readers are well-informed about the continuously evolving crypto landscape. He is also a staunch advocate for rigorous security practices in the space. Before joining The Block, Vishal held positions at IDG ComputerWorld, CIO, and Crypto Briefing. He can be reached on Twitter at @vishal4c and via email at [email protected]


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