Michael Egorov, the founder of Curve Finance, has responded about the recent liquidation event, attributing the significant APY to the shortage of crvUSD available on the platform.
Egorov borrowed $95.7 million in stablecoins (mainly crvUSD) against $141 million in CRV collateral over five distinct protocols. Following a partial liquidation, his position was $95.7 million in stablecoins (mainly crvUSD) borrowed against $141 million in CRV collateral on those protocols.
As reported earlier by the CryptoTimes, Micheal Egorov was facing liquidation risk for his $20.6 million debt collateralized with 111.87 million CRV ($33.87 million) across four platforms.
Egorov’s overleveraged position caused a cascade effect, resulting in significant bad debt totaling around $10 million. Egorov assured the community that he is working with the Curve Finance team to resolve the bad debt through a tweet.
Egorov also revealed that he has already repaid 93% of the debt to help the affected user. He further plans to settle the remaining amount promptly. This initiative is crucial to prevent further disruptions and mitigate losses for other users on the platform.
Curve Finance, known for its stablecoin-focused automated market maker (AMM), is likely reviewing its protocols and risk management strategies in response to this event.
Also Read: Curve Finance Rewards Dev $250K for Vulnerability Discovery
