Curve [CRV] nosedives 23% in just one day following founder’s financial crisis

• What’s happening with Curve DAO’s founder?
• CRV taking a nosedive.

Curve DAO [CRV] has been making headlines lately due to some concerning developments. The founder’s heavy borrowing and subsequent liquidations have caused quite a stir in the crypto community.

Risk factors for Curve DAO

Recent data from Arkham Intelligence shows that a substantial amount of CRV tokens, worth $140 million, were on the verge of liquidation.

This situation arose when the founder, Michael Egorov, borrowed a significant sum of $95.7 million in stablecoins against $141 million in CRV across multiple protocols.

The risk is heightened by the platform’s borrowing conditions, with a substantial portion at a sky-high 120% annual percentage yield due to a shortage of crvUSD for borrowing against CRV.

The price drop of CRV has only added to the pressure, leading to further liquidations and a downward trend.

Declining CRV prices

A closer look at CRV’s price trend on CryptoQuant suggests more liquidations could be on the horizon. The price has plummeted by over 23%, dropping from $0.36 to $0.27.

On the 10th and 11th of June, CRV experienced consecutive declines totaling over 16%, falling from $0.41 to $0.35.

Source: TradingView

However, there was a brief 2.74% increase on the 11th of June, pushing the price to $0.36 temporarily, hinting at a possible rebound.

This recent price drop marked the steepest decline for CRV in over a year, raising concerns among investors.

Record high exchange reserves

The recent events have triggered a rush among holders to offload their Curve DAO (CRV) holdings on exchanges. According to our analysis on CryptoQuant, there has been a significant surge in CRV sent to exchanges in the past 24 hours.

Source: CryptoQuant

The data reveals a substantial increase in exchange reserves, now exceeding 627 million units, setting a new all-time high record.

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This spike in exchange reserves indicates a mass movement of holdings, potentially leading to a further price decrease for CRV.