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Curve Finance debt will cause ‘one more stress test’ in February — Analyst

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The systemic risk that lies at the heart of the Curve Finance protocol has not been completely resolved, and the protocol will face “one more stress test” in February, according to a Jan. 8 report from pseudonymous crypto investment analyst and X user DeFi Made Here.

According to the report, a large number of Curve (CRV) tokens will become tradeable in the coming weeks, and the sale of these tokens may lead to “a similar situation which happened back in August” where the CRV token threatened to collapse in price. However, DeFi Made Here also cautioned that this scenario is only a possibility.

1/ $CRV is a ticking bomb

The Curve ecosystem is in the hands of “questionable people/entities” and Mich’s ability to service his debt which grows $1.7M/month.

I will explain why I see a light at the end of the tunnel and how @0xSifu is playing this game. pic.twitter.com/KPZ97JVNkm

— DeFi Made Here (@DeFi_Made_Here) January 8, 2024

According to their X profile, DeFi Made Here is an analyst for crypto investment fund Alphabeth Capital and an adviser for Web3 developer Good Entry Labs.

The founder of Curve Finance, Michael Egorov, owed $100 million in debt to various decentralized finance (DeFi) protocols as of Aug/ 1, according to crypto research firm Delphi Digital. This debt was backed by CRV tokens, and critics pointed to it as a risk to the Curve protocol and the DeFI system as a whole. However, when Curve was exploited for $62 million in August, Egorov paid back some of his debts, and the protocol seemed to have weathered the storm. At the time of the exploit, the CRV token price was approximately $0.63. It has since fallen to $0.55, a 12.7%

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Author: Tom Blackstone

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