Curve Founder's Crypto Bet Backfires, Leading to Massive LiquidationsMichael Egorov, the founder of Curve Finance, has experienced significant financial turmoil as the value of Curve’s governance token, CRV, plummeted. The sharp decline in CRV’s price led to tens of millions in liquidations, drastically reducing Egorov’s holdings. The CRV price has sunk as low as $0.23 (even reaching $0.21 on Binance), setting a new all-time low for the token, and has since rebounded slightly at the time of writing.On June 13, on-chain analytics team Lookonchain highlighted Egorov’s plight, revealing his collateral across four lending protocols had been slashed to just $33.9 million in CRV, supporting $20.6 million in debt. This massive liquidation event followed Egorov’s initial use of $141 million in CRV to secure $95.7 million in stablecoin loans through DeFi lending protocols like Inverse, UwU Lend, Fraxlend, LlamaLend, and Aave, as noted by Arkham Intelligence.The #Curvefi founder(Michale Egorov) is being liquidated!He currently has 111.87M $CRV($33.87M) in collateral and $20.6M in debt on 4 platforms.https://t.co/WM1nW8JKwU pic.twitter.com/huwgetBXuS— Lookonchain (@lookonchain) June 13, 2024 Egorov’s positions on Inverse and UwU currently have a health rate of 1.64 and 1.16 at the time of writing, respectively. Egorov has begun repaying the borrowed stablecoin DOLA, on-chain data shows.Source: DeBankA day earlier, Arkham reported that $50 million of Egorov’s loans were in crvUSD from LlamaLend, draining the protocol’s crvUSD pool and incurring an annual interest rate of around 120%. They warned that a mere 10% drop in CRV’s price could trigger Egorov’s liquidations in the thread below. UPDATE: Michael Egorov was liquidated for $140 Million in CRV.The price of CRV fell through Egorov’s liquidation threshold this morning, with his entire 9-figure lending position liquidated across 5 protocols.Two of his accounts incurred together over a million dollars of bad… https://t.co/gT37oBy82Z pic.twitter.com/41np1Gkh0S— Arkham (@ArkhamIntel) June 13, 2024 Egorov faced a $5 million liquidation on UwU Lend, and while he made some repayments on Inverse, it was not enough to prevent further losses. The overall impact saw about 78% of his holdings liquidated to cover his debts.Curve Finance’s lending protocol, Curve Lend, has also suffered from the CRV downturn. On June 13, Curve contributor Saint Rat tweeted that the protocol had accrued $11.5 million in bad debt. This debt could be cleared if CRV’s price rises to $0.33, a significant jump from its current value of around $0.28.$CRV isn’t deadWe do have $11.5M of bad debt in Curve Lend, but this could clear itself if $CRV price goes back up through the bands between $0.29-0.33Theoretically if the CRV price got to around $0.40ish everyone would be repaid— Saint (Llama) Rat (@saint_rat) June 13, 2024 Egorov was able to lower his bad debt to around $1 million after receiving $6 million worth of Tether (USDT) in two separate transactions from Christian Seale, a NextGen Venture Partner. Seale confirmed this on Twitter, aligning with publicly available onchain data.So yeah I had my popcorn ready but the $CRV show only began just after I felt asleep.Here is my assessment of the what happened:Silo/FraxlendThe first domino's to fall, all CRV got liquidated on Binance and the pools didn't collect any bad debt.InverseMost debt eliminated…— USD Denominated (@YouAreMyYield) June 13, 2024 Large investors, known as whales, were significantly impacted by a series of liquidations PeckShieldAlert data revealed a whale losing 29.6 million CRV tokens when the price fell below $0.25. Spot On Chain also identified a whale with the address 0xF07, who deposited 29.62 million CRV (valued at $7.68 million) to Binance due to a liquidation event on Fraxlend.The $CRV price dropped up to 34% (3H) after the news of the #Curvefi founder (Michale Egorov) being liquidated broke out!Here are the on-chain highlights1. Michale Egorov (@newmichwill) currently has 139M $CRV ($37M) in collateral and $27M in debt across 3… pic.twitter.com/tJLtmLUqLo— Spot On Chain (@spotonchain) June 13, 2024 This situation isn't new for Egorov, who last year faced a similar crisis. At that time, $60 million in loans borrowed from Aave by Egorov threatened to leave the protocol with bad debt if liquidated. In response, Gauntlet, a risk management firm, recommended freezing Aave’s v2 CRV market to prevent further risks, a proposal that passed in August 2023. To address his mounting debts, Egorov sold 106 million CRV in private deals for $46 million, which helped him pay off his Aave debts by September with an $11 million USDT deposit. ConclusionCurve Finance founder Michael Egorov faced massive liquidations after a CRV price crash wiped out a substantial portion of his holdings used as collateral for multi-million dollar loans across several DeFi protocols. Despite receiving aid, Egorov still suffered major losses in this liquidation crisis. FAQs1: What led to Michael Egorov's liquidations?The sharp decline in the price of CRV, Curve Finance's governance token, caused Egorov's collateral backing his stablecoin loans to become undercollateralized, triggering liquidations across multiple lending protocols.2: How much value did Egorov lose in the liquidations? Initially owing $95.7 million in stablecoin loans backed by $141 million in CRV, Egorov's collateral was slashed to only $33.9 million after liquidations, resulting in around 78% of his holdings being lost.3: Which lending protocols were impacted by Egorov's liquidations?Egorov's positions were liquidated on Inverse, UwU Lend, Fraxlend, LlamaLend, and Aave, with Curve's own Curve Lend protocol also accruing $11.5 million in bad debt.This article has been refined and enhanced by ChatGPT.