Curve Founder Forced To Sell $677,000 Of CRV, Token Falling

CRV, the native token of Curve, a stablecoin decentralized exchange (DEX), is under immense selling pressure. After the hack of July 2023, CRV has never been the same again.

The native token of Curve, a stablecoin decentralized exchange (DEX), is facing strong selling pressure. Following the hack in July 2023, CRV has struggled to recover. However, recent events, including the liquidation of Curve founder Michael Erogov’s loans, have exacerbated the situation for holders.

According to on-chain data, Erogov was forced to sell a total of $677,000 worth of CRV in the market to repay part of his loan. This occurred on July 25, as reported by Lookonchain.

Currently, CRV is displaying a downtrend, with lower lows being set. While the dump has not been as drastic as in June, the token remains weak and could potentially drop below crucial support levels. At the moment, this support is at the double bottom of $0.21. On the upper end, resistance lies at $0.30.

Interestingly, this resistance level acted as support in June when prices fell through the floor, largely due to the liquidation of Erogov’s loans. At the time, there were concerns within the crypto community that the founder’s loans would further destabilize the protocol, negatively impacting CRV holders.

On-chain data reveals that Erogov had borrowed around $100 million in stablecoins, using $140 million in CRV as collateral for the loan. Some reports suggest that the founder may have used the loan to purchase prime real estate.

As a result of the forced liquidations and Erogov’s subsequent efforts to offload CRV, which allowed him to be liquidated following the hack, prices were driven even lower.

Following the hack on July 30, CRV has declined by over 50%. Holders are facing difficulties as crypto prices also experience a downturn, retracing from their March 2024 peaks.

After most of the CRV collateral posted by Erogov was recovered by lending protocols, including Frax and Aave, the selling pressure has eased somewhat. However, the token continues to lack momentum.

This weakness is concerning, especially given the positive developments for Curve this week. Being an Ethereum-based DEX, the approval and trading of spot Ethereum ETFs would ultimately benefit the protocol.

In addition to the derivative product opening up institutions to Ethereum, Curve is also expanding its presence. Recently, a proposal was approved by the community to enhance CRV liquidity by connecting Solana and Ethereum through USDT.

This initiative, proposed by Picasso Network, involved the creation of a pool consisting of USDT on Solana and USDT on Ethereum. The aim is to encourage cross-chain activity and provide further incentives for liquidity providers.