Justin Sun and Others to Address Potential Curve Finance Bad Debt
- Bridget Hubbard
- August 2, 2023
- news, Crypto
- Crypto, Curve, Justin Sun, Potential
- 0 Comments
Tron founder Justin Sun and other backers help Curve Finance founder Michael Egorov after a $47 million hack, stabilizing his loans and mitigating DeFi risks.
Key Points
- Tron founder Justin Sun and others help Curve Finance founder Michael Egorov amidst a $47 million hack, stabilizing his loans and providing relief.
- Sun acquires CRV tokens from Egorov in an OTC deal, reducing his loan value on Aave from $63.3 million to $54.1 million.
- Other participants take advantage of Sun’s purchases, buying CRV tokens at a discounted price through OTC transactions.
- The support from Sun and backers mitigates the risk of a potential DeFi implosion and highlights the importance of security and risk management in the DeFi space.
Tron founder Justin Sun and other backers have come forward to alleviate a potential bad debt crisis faced by Curve Finance founder Michael Egorov. The decentralized protocol recently experienced a $47 million hack, but support from Sun and others has provided some relief.
JUST NOW:
Justin Sun buys $CRV for $2.9 million from Michael Egorov and forms a partnership with Curve.#cryptonewstoday #JustinSun #CurveFinance $TRX #MichaelEgorov #Crypto pic.twitter.com/OkYlYhgdlx
— The Highlight (@thehighlight0) August 1, 2023
Egorov’s Financial Situation
Egorov’s financial situation raised concerns when it was revealed that he had taken approximately $100 million in loans across different lending protocols, using 47% of the circulating supply of Curve DAO (CRV) as collateral. The hack on Curve Finance further exacerbated the situation.
Exploiting a vulnerability related to the Vyper contract-oriented programming language, attackers managed to steal cryptocurrencies worth $47 million. This included 7.19 million CRV tokens, valued at around $4.52 million. The hack caused a significant drop in the price of CRV, increasing the risk of Egorov’s substantial lending position being liquidated.
Egorov’s loan on Aave, however, has seen a decrease in value from $63.3 million to $54.1 million thanks to support from wealthy participants. Justin Sun, for example, acquired roughly 5 million CRV tokens from Egorov for $2.3 million in an over-the-counter (OTC) deal. Sun expressed his commitment to assisting Curve Finance through a tweet, highlighting the strong partnership between the two.
PeckShield data reveals that other participants took advantage of Sun’s purchases to buy CRV tokens at a discounted price through OTC transactions. Egorov sold 3.75 million CRV tokens to NFT owner Jeffrey Huang, also known as Machi Big Brother, and later sold 2.5 million CRV tokens to Cream Finance. On-chain data tracking website Lookonchain reports that Egorov has sold a total of 39.25 million CRV tokens for $0.4 per token and received approximately 15.8 million USDT in return.
Final Thoughts
The support from Justin Sun and other backers has provided much-needed relief for Egorov and Curve Finance. By acquiring CRV tokens and stabilizing the situation, they have mitigated the risk of a potential DeFi implosion. Sun’s involvement demonstrates the commitment to maintaining the stability and integrity of the decentralized finance ecosystem.
As the DeFi space continues to grow, events like this highlight the importance of robust security measures and risk management practices. While hacks and financial crises are concerning, the proactive response from supporters like Justin Sun demonstrates the resilience within the DeFi community and the willingness to address and resolve challenges.
