Reported by Cointelegraph, Michael Egorov, founder of decentralized finance (DeFi) protocol Curve Finance, claims to have repaid 93% of $10 million in bad debt from the protocol's soft liquidation triggered earlier in the day.
"Size of my positions was too large for markets to handle and caused 10M of bad debt," said Egorov. "I have already repaid 93%, and I intend to repay the rest very shortly."
On June 13, Curve Finance's soft liquidation mechanism successfully managed a real-world test during a recent hacking attempt, but its native CRV token price plunged by over 28% amid the chaos. According to blockchain analytics firm Arkham Intelligence, Egorov himself faced $140 million in liquidations due to "borrowing $95.7M in stablecoins (mostly crvUSD) against $141M in CRV across five accounts on five protocols."
During the peak of the hack, Egorov faced paying $60 million in annualized fees to maintain his borrowings. Arkham explained:
"This is because there is almost no remaining crvUSD available to borrow against CRV on Llamalend. Three of Egorov's accounts already make up over 90% of the borrowed crvUSD on the protocol. If the price of CRV drops by ~10%, these positions may begin to be liquidated."
Egorov has since proposed burning 10% of the outstanding CRV tokens, worth $37 million at the time of publication, to stabilize the token's price to pre-incident levels. "As a reward, Active voters will earn a 3-month APY booster on all platform deposits," the blockchain executive commented.
DeFi
