Michael Egorov, the founder of Curve Finance, a decentralized finance (DeFi) protocol for stablecoin swaps, has recently paid off his loans on Aave, one of the largest lending platforms in DeFi. He now has a remaining debt of $42.7 million across four other DeFi protocols.
According to Lookonchain, an on-chain analytics platform, Egorov deposited 68 million CRV tokens, worth $35.5 million, to Silo, a DeFi protocol that allows users to borrow and lend synthetic stablecoins. He then borrowed 10.77 million crvUSD, a stablecoin pegged to the US dollar, and swapped it into Tether (USDT), another popular stablecoin. He used the USDT to repay all his debt on Aave.
Michael Egorov deposited 68M $CRV ($35.5M) to #Silo and borrowed 10.77M $crvUSD in the past 2 days.
Then swapped $crvUSD for $USDT and repaid the all debt on #Aave.
He currently has 253.67M $CRV($132.52M) in collateral and $42.7M in debt on 4 platforms.https://t.co/stkFvDrlnv pic.twitter.com/oBQ4yiT9Xs
— Lookonchain (@lookonchain) September 27, 2023
Egorov Moved Ahead With the Payment in Light of Potential Risks
Egorov’s debt reduction comes after he faced a potential liquidation risk due to the drop in the price of CRV tokens in August. CRV is the native token of Curve Finance and is used as collateral for borrowing on various DeFi platforms. On Aug. 1, Egorov had a total debt of $100 million and a utilization rate of over 90%, meaning that he had borrowed almost all of his available credit.
The price of CRV tokens plummeted from $0.73 on July 30 to $0.50 on Aug. 1, after Curve Finance suffered a $47 million hack due to a reentrancy vulnerability in its Vyper programming language. The hack allowed attackers to exploit several stable pools on Curve Finance and drain funds from them.
Egorov managed to lower his debt and utilization rate by depositing more CRV tokens and repaying some of his loans in early August. However, he still had a large debt position on Aave and other DeFi protocols such as Fraxlend, Inverse, and Cream.
By clearing his Aave debt, Egorov has reduced his overall debt to $42.7 million and increased his collateral to 253.67 million CRV tokens, worth $132.5 million. He still has loans on Silo, Fraxlend, Inverse, and Cream, but his utilization rate is now below 50%, which lowers his liquidation risk.
