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June 12, 2023 12:43 PM | 1 min learn
An intriguing transfer was made by a pockets believed to be owned by Michael Egorov, the creator of Curve Finance, with the pockets deposited an eye-popping 38 million Curve DAO (CRYPTO: CRV) tokens, valued at round $24 million, into Aave (CRYPTO: AAVE), a decentralized lending platform.
On-chain analyst Lookonchain pointed out that this strategic transfer over the weekend was executed by Egorov to bolster his collateral, thus diminishing the probability of liquidation.
The size of the collateral is staggering, as Egorov backed his mortgage on Aave with a whopping 277 million CRV tokens. This stash represents 32% of CRV’s whole circulating provide.
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Quoting information from DeBank, The Block reported that Egorov took out a hefty mortgage from Aave that exceeded $64 million in stablecoins.
He used practically a 3rd of all CRV tokens in circulation as collateral, underlining the influential half that main token holders can wield within the DeFi ecosystem.
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Lookonchain made a comment on the well being of Egorov’s collateralized place, stating that his current deposit boosted the well being score from 1.3 to 1.5.
This enhancement is important since a well being score of 1 is normally the tipping level for liquidation.
At current, Egorov’s place has a safer well being fee of 1.7.
Contemplating the sheer quantity of CRV tokens that Egorov used as collateral, a widespread liquidation may wreak havoc available on the market by inflicting a steep decline within the token’s worth.
DeFi platforms inherently perform automated liquidations, and these can set off a domino impact.
The worth of the collateralized asset may nosedive until the market reaches equilibrium.
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