Buy Биткоин BTC
Bitcoin (BTC)
Buy Эфир ETH
Ethereum (ETH)
Buy Ripple XRP
Ripple (XRP)
Buy Tron TRX
Tron (TRX)
Buy Polygon Matik
Polygon (MATIC)
Buy Solana SOL
Solana (SOL)
Buy Dogecoin DOGE
Dogecoin (DOGE)
Buy Avalanche AVAX
Avalanche (AVAX)
Buy Cardano ADA
Cardano (ADA)
Buy Polkadot DOT
Polkadot (DOT)
Buy Syscoin SYS
Syscoin (SYS)

The analyst believes that Curve Finance is a «ticking bomb»

Altcoins: The analyst believes that Curve Finance is a «ticking bomb»

Curve Finance protocol is currently facing significant risks that could potentially lead to a crisis. A user on social network X, known as Defi_Made_Here, has pointed out several factors that contribute to this precarious situation. The protocol's systemic risk, which was not fully addressed after a hack in the summer of 2023, remains a ticking bomb.

One of the key concerns is the co-founder, Mikhail Egorov, who has been struggling to repay cash loans for an extended period. Despite recent news of partial loan repayments, Egorov still carries a substantial debt. Shockingly, his debt is increasing by $1.7 million every month, adding to the financial strain.

In an attempt to alleviate the situation, Egorov took additional loans worth $75 million in the fall of 2023, using Curve's stablecoin, crvUSD, as collateral. However, this move introduces further risks to the protocol's stability.

The primary liquidity provider involved in this scenario is DeFi developer Michael Patryn, also known as 0xSifu. The analyst reveals that Patryn is "shorting" the protocol's native token, CRV, which puts additional pressure on Curve Finance and its lenders.

Furthermore, it is anticipated that 0xSifu may withdraw liquidity from the pool once the protocol's OTC tokens become tradable in February 2024. This action will serve as a real stress test for the protocol, potentially exacerbating the risks involved.

Defi_Made_Here emphasizes that while this development is not inevitable, it poses significant risks to the entire Curve Finance protocol.

As of now, Curve Finance holds the 18th position among the largest DeFi projects, with approximately $1.6 billion worth of assets locked in the protocol, according to DeFiLlama.

It is worth noting that the founder of Curve Finance has previously managed to repay all debts on #Aave, demonstrating a commitment to resolving financial obligations.

In conclusion, the risks facing Curve Finance protocol are substantial and require careful attention. The systemic risk, co-founder's debt, and the actions of liquidity providers all contribute to the potential crisis. It is crucial for the protocol's stakeholders to address these concerns promptly to safeguard the stability and integrity of #Curve Finance.

Share this news and win 10 USDT with daily contest on CryptoFingers Telegram.
Make crypto bots for trading
Regulation: The French regulator announced a possible blocking of the Bybit platform
The French financial markets regulator (AMF) has issued a warning to investors about the possible restriction of access to the Bybit platform's website. It also noted that..
Mining: During the last three years, El Salvador mined 473.5 BTC using geothermal energy
Since 2021, El Salvador has mined 473.5 BTC (equivalent to $29.3 million) through the use of geothermal energy. Such information was released by Reuters, referring to the state structure..
Education: A Complete Guide to Stablecoins: What Are They & How Do They Work?
Stablecoins have become increasingly popular in the crypto markets, providing a range of use cases for professional traders, businesses, and individuals. Read on to learn what stablecoins..
Artificial Intelligence (AI): Microsoft and Amazon will spend $5 billion on AI development in France
Microsoft and Amazon have committed $5.6 billion to France during the annual Opt for France summit.