Curve founder pays Aave loan back in the amount of UST $ 1.3 million in order to reduce the risk of liquidation: Data
Curve founder pays Aave loan back in the amount of UST $ 1.3 million in order to reduce the risk of liquidation: Data
A wallet associated with Michael Egorov, the founder of the decentralized stock exchange (Dex) and the automated Market Maker Protocol Curve, has reduced his debts in the chain by repaying a loan of 1.35 million USDT on the decentralized credit platform AAVE.
egorov's step takes place because the native token (CRV) of Curve, which serves as security for the loan, has decreased significantly last week, which reduces the health factor of the loan and increased the liquidation risk.
eGorov returns 1.3 million USD to Aave
egorov began to borrow stable coins on Aave. Data from the blockchain analysis platform Debank show that the Curve founder has deposited 2888.7 million CRV tokens worth $ 173 million at AAVE in order to borrow about 64 million USDT in an open position. The CRV tokens make up about 34 % of the total offer of assets.
Analysis by blockchain expert Lookonchain unveiled earn worth $ 37.7 million to the Bitfinex crypto exchange, while $ 51 million in USDC were sent to the Market-Making protocol Wintermute Trading.
The open position three days ago had a health rate of 1.68. However, the health factor at the time of the writing of this article was 1.58 due to the falling CRV value, which has dropped by more than 20 % in the past seven days. Data from CoinmarketCap show that the asset was traded at $ 0.60 at the time of printing.
Security is automatically liquidated when the health set falls below 1.00. EGOROV was forced to return some USDT token to contain the risk of liquidation.
community reacts
The high CRV share associated with the loan has attracted the attention of the community of decentralized finances (defi) because it could lead to a strong sales pressure on the asset and increase the risk of a platform resolution.
Gauntlet, a company that manages the defect risk, has submitted a proposal to the AAVE community that suggests that all CRV tokens used as security on the V2 platform and the lending ratio (LTV) for CRV to 0 is to be prevented, which means that this is to be prevented with EGOROV more CRV as safety Increase the risk of concentration and minimize the possibility of the development of unrestricted claims.
In the meantime, the curve-aave loan fiasco led to the fact that Usdt easily slips from its 1-1 bond to the USD. While whales and investors use arbitrage opportunities to exchange assets for USDC and DAI, Tether-Cto Paul Ardoino assured the community that the company was ready for repayment..
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