Crisis at DeFi giant Curve eases with assistance from Justin Sun and others
Crisis at DeFi giant Curve eases with assistance from Justin Sun and others
The Blockchain Industry: Stepping Up to Protect Against Risk
The blockchain industry is no stranger to financial risks and potential bad debt situations. Recently, Justin Sun, the founder of the Tron blockchain, jumped in to shield against a potential crisis stemming from falling CRV token prices. This move could potentially impact a massive loan connected to Curve Finance founder Michael Egorov.
The Purchase and the Motive
On Tuesday, blockchain data revealed that Sun purchased approximately 5 million CRV tokens through an over-the-counter transaction. The tokens were bought from a wallet associated with “Curve.fi Founder” at an average price of $0.4, amounting to over $2.3 million. Although Sun paid less than curve’s current trading price, the purchase was made at a level above the price at which Egorov’s loan may be liquidated.
In an enthusiastic tweet, Sun expressed his commitment to assisting Curve. He emphasized their steadfast partnership and dedication to providing support whenever needed. As they join forces, they aim to empower the community and drive decentralized finance forward. One notable endeavor in this direction is the introduction of an stUSDT pool on Curve, which amplifies user benefits. stUSDT is described as the “first real-world asset protocol on the Tron Network.”
A Show of Solidarity
Sun’s purchase did not go unnoticed. Shortly after his acquisition, other prominent players in the decentralized finance (DeFi) industry started picking up discounted CRV tokens through over-the-counter trading. Crypto investor Jeffrey Huang, also known as Machi Big Brother, bought 3.75 million tokens. Additionally, crypto fund DWF Labs and DeFi protocol each acquired 2.5 million curve tokens.
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Egorov himself sold a total of 39.25 million CRV tokens through over-the-counter trading, thereby receiving $15.8 million. These transactions underline the urgency to address the risks associated with declining token prices.
The Exploit and Consequences
Curve Finance, a significant player in stablecoin swapping, recently fell victim to an exploit on Sunday. This incident led to a decline in the price of the CRV token, posing a threat to a $168 million stash associated with Egorov. The potential liquidation of such a substantial position raised concerns among traders. Moreover, the market’s already falling prices could further worsen the situation if liquidated assets are sold.
It’s crucial to note that the repercussions extend beyond Curve Finance. The use of CRV as a trading pair and ballast in trading pools across the DeFi ecosystem means that the liquidation of this large position could create pressure on other DeFi protocols.
Stepping Up and Protecting the Community
As the blockchain industry confronts these challenges, individuals like Justin Sun are stepping up to protect the community and preserve their own token holdings. These actions deserve community acclaim, as they demonstrate a commitment to safeguarding the ecosystem and maintaining stability.
The recent events involving the CRV token and Curve Finance shed light on the inherent risks in the fast-paced and often turbulent blockchain industry. However, they also showcase the resilience and proactive nature of industry players. By leveraging blockchain technology and embarking on joint efforts, these players aim to forge decentralized finance and empower the community as a whole.
Edited by Sheldon Reback.
