"Cash out" or "Reluctance to sell"? How much CRV did the founder of Curve mortgage in Aave?

Author: Frank, Foresight News

On-chain data shows that due to the recent drop in CRV prices, Curve founder Michael Egorov deposited 38 million CRVs ($24.5 million) into Aave again yesterday to reduce his loan liquidation risk.

This article, Foresight News, will take you to a brief understanding of how much CRV the founder of Curve has mortgaged in Aave, how much money he borrowed, where he spent it, and what impact it may have on the market outlook?

How much did you borrow in Aave?

According to DeBank data, as of the time of publication, Curve founder Michael Egorov has deposited a total of over US$1.8 in assets to Aave V2, mainly 277 million CRV (approximately US$178 million).

And he has lent 64.23 million USDT from Aave V2, and the current health coefficient of this address in Aave V2 is 1.68;.

In addition, he also deposited more than 14.1 million CRV (about 9.09 million US dollars) to Aave V3, and lent about 2.78 million USDT and 743,000 USDC.

Currently the address has a health factor of 1.68 in Aave v2;.

To sum up, as of now, the founder of Curve has deposited 291 million CRV ($187 million) in Aave and borrowed about $67.75 million in stable coins.

Where did the borrowed money go?

According to Lookonchain data monitoring, Curve founder Michael Egorov historically borrowed funds through Aave mortgages, mainly divided into three destinations:

• 37.7 million USDT deposited into Bitfinex;
• 51 million USDC were transferred to Wintermute Trading;
• 1420 USDT were used to purchase ETH and USDC during USDC decoupling;

First, he deposited a total of 37.7 million USDT to Bitfinex, of which 31 million USDT was transferred from April 10 to April 14, during which the price of Bitcoin rose from $28,000 to over $30,000. If So far, it is still in a state of loss.

From June to September 2021, he also transferred 4.74 million USDT to the address starting with "0x;b;10;f", mainly for providing liquidity for Curve, and deposited a total of 4 million USDT on Kraken .

Since May 17 this year, he has transferred a total of 51 million USDC to Wintermute Trading through the address starting with "0x;9660;".

In addition, during the unanchoring period of USDC in March this year, he borrowed 6.8 million USDT and purchased 4014 ETH at a price of 1694 USD; and borrowed 7.4 million USDT to purchase 7.8 million USDC at a price of 0.95 USD. is clearly profitable.

"Cash out" or "Reluctance to sell"?

CoinGecko data shows that the current circulating supply of CRV is 852 million pieces, which means that the 291 million CRVs pledged by Michael Egorov in Aave account for 34.15% of the CRV circulating supply;!

For Michael Egorov, he held more than one-third of the CRV circulation in his hand, but did not sell directly for profit, but exchanged funds through mortgages in the loan agreement to avoid direct selling pressure on the secondary market. It is a "sell out" choice.

But from another point of view, such a large amount of CRV is difficult to sell smoothly in the secondary market, and Aave's mortgage loan provides a "cash-out" option that can be realized with the lowest impact.

This has also led to the current 291 million CRVs as collateral, like a hidden barrier lake, which is a great threat to the Curve ecology and the Aave protocol. You must know that the CRV long-air battle in November last year ended up This resulted in approximately $1.6 million in bad debts for Aave.

Therefore, if the market falls further and liquidity continues to be tight, once the CRV price falls to the liquidation point, it is likely to lead to a series of stampedes.

It is not even ruled out that someone will accurately ambush this large liquidation point (although since the CRV long-short war, Aave has prohibited users from borrowing CRV, which has reduced the risk of CRV being shorted to some extent), as the founder of dForce Yang Mindao said Tweet said:

"Aave V2 has no deposit limit, which makes it impossible to control the collateral exposure. The only thing you can do is to increase the USDT borrowing cost and mortgage your own currency for leverage. It seems that it is reluctant to sell, but it is actually a kind of tempting short."

It is worth noting that Michael Egorov, the founder of Curve, has also been in an "eventful autumn" in public opinion recently:

• It was first reported by the media on May 28 that he and his wife Anna Egorova bought two luxury houses in Melbourne, with a total cost of 41 million US dollars, covering an area of 4251 square meters;
• Subsequently, on the 9th of this month, ParaFi Capital, Framework Ventures and 1kx three VCs sued Curve founder Michael Egorov for allegedly participating in fraudulent activities and handling trade secrets, claiming that he invested $1 million in Curve in 2020, and then Michael Egorov deposited the investment Into Curve's liquidity pool, the three VCs did not receive CRV tokens or refunds.