CRV’s uncertain outlook as its price rallies on hopes of the hacker returning funds.

CRV's uncertain outlook as its price rallies on hopes of the hacker returning funds.

The Impact of a Hacker on Curve Finance and the Future of CRV


Curve (CRV), the native token of Curve Finance decentralized exchange (DEX) and the governance token of Curve DAO, experienced a rally of 7% on Friday, reaching $0.61. This surge in price came after a hacker who had stolen millions of funds from Curve Finance and other decentralized finance (DeFi) protocols started returning the funds[^1^].

The hacker, responsible for draining over $50 million from Curve Finance, Metronome, and Alchemix, has already returned $8.9 million to Alchemix according to on-chain data from Etherscan[^1^]. This has raised hopes that funds may soon be transferred back to Curve Finance, which had been considered a trusted DeFi protocol prior to the hack.

However, it remains uncertain whether the hacker’s refund will solve the major problem faced by Curve Finance. The hack, executed through an exploit in the Vyper programming language used by Curve and other DeFi protocols, has severely damaged investor confidence in the protocol’s security[^1^]. This incident has revealed that DeFi investor funds are not as secure as previously believed.

Consequently, many DeFi investors have withdrawn their crypto capital from the Curve Finance platform. As reported by DeFi Llama, the total value locked (TVL) in Curve Finance dropped from $3.7 billion to $2.7 billion after the hack[^1^]. This loss of investor confidence is likely to have long-lasting consequences for the protocol’s future TVL growth and could impede the value of CRV.

To address the situation, Curve Finance has set a deadline of August 6th for the hacker to return the funds. In exchange, the protocol has offered a 10% cut and a promise that no legal action will be pursued, as stated in an on-chain message[^1^]. If the deadline is not met, Curve Finance has threatened to pursue the hacker through legal means.

Price Prediction – Where Next for Curve (CRV)?

Despite the potential long-term challenges resulting from decreased trust in the Curve Finance protocol, the return of stolen funds by the hacker could reduce the short-term risk of liquidating one of CRV’s major whales and his long position on CRV[^1^]. Michael Egorov, the founder of Curve Finance, is believed to have borrowed up to $80 million against his CRV holdings across various decentralized finance lending/borrowing protocols like Aave[^1^].

Traders have identified $0.368 as a critical level that could trigger the liquidation of Egorov’s CRV collateral, which has been used to borrow $50 million in stablecoins on Aave[^1^]. If this liquidation occurs, Aave would be compelled to sell Egorov’s CRV collateral, and concerns have been raised about whether CRV could withstand this selling pressure.

Assuming the hacker returns the funds to Curve Finance, the value of CRV may experience a recovery back towards its pre-hack levels around $0.74[^1^]. However, its ability to surpass significant resistance posed by its 21, 50, and 100-Day Moving Averages (DMA) remains uncertain[^1^]. CRV currently faces long-term technical selling pressure, having been trapped within a downtrend since early June’s “death cross” and mid-July’s rejection of a test of the 200DMA[^1^].

Crypto Alternatives to Consider

Given the uncertain long-term outlook for CRV, investors seeking the possibility of near-term gains may explore high-risk-high-reward investment strategies, such as participating in crypto presales. In crypto presales, investors purchase tokens of emerging crypto projects to support their development[^1^]. These tokens are typically offered at low prices, and historically, presales have provided exponential gains to early investors.

Many of these projects boast visionary teams and revolutionary crypto applications/platforms. Identifying such projects can present an attractive risk/reward ratio for presale investments[^1^]. If you are interested in exploring presale projects, the team at Cryptonews provides detailed information on 15 of what they consider the best crypto presales of 2023[^1^].

It is important to note that investing in crypto is high-risk, and this article is for informational purposes only and should not be considered investment advice. There is a potential risk of losing all of your capital[^1^].

Reference: [^1^]: CRV Token Surges 7% After Hacker Begins Returning Funds