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Curve Founder's Redemption: Aave Loan Repaid, but $42 Million Still in Defi Limbo

Jack Evans
Sep 27, 2023 at 10:11 pm

In a strategic move that sent ripples through the decentralized finance (DeFi) space, Michael Egorov, co-founder of Curve Finance, recently completed a remarkable chapter in his crypto odyssey. With a staggering 68 million CRV, worth approximately $35 million, he set the stage for his financial redemption. Egorov's first bold step was to withdraw 10.7 million crvUSD, Curve's decentralized stablecoin, from the non-custodial lending protocol. What followed was a meticulous dance in the crypto realm.

He deftly converted his crvUSD holdings into USDT, a move that positioned him to settle his looming debt on Aave, the decentralized lending and borrowing protocol powered by Ethereum. This maneuver was a testament to Egorov's astute financial acumen, marking the beginning of his quest to free himself from the clutches of debt.

However, even as Egorov took strides towards financial liberation, shadows of indebtedness still loomed large. The Curve founder remained beholden to four DeFi lenders, namely Silo, Fraxlend, Inverse, and Cream Finance. Their collective claim stood at a staggering $42 million, collateralized by a formidable 253.7 million CRV, valuing at $132 million.

Egorov's redemption narrative gained momentum against the backdrop of CRV's price volatility. The crypto market had experienced turbulence, a direct consequence of a re-entrancy attack that had struck Curve Finance in late July 2023. Exploiting a vulnerability in a version of Vyper's code, hackers had cunningly siphoned tens of millions worth of coins.

Amidst the chaos, maximal extractable value (MEV) bot operators seized the opportunity, reaping hundreds of Ether (ETH) during the ensuing on-chain showdown for precious block space. Transaction priorities were fiercely contested, adding layers of complexity to an already tumultuous situation.

In the wake of the attack, Egorov found himself in a race against time, forging multiple over-the-counter (OTC) agreements with a consortium of investors. Among these investors were prominent names, including market maker Wintermute and Tron co-founder Justin Sun. Their shared goal? To secure the funds needed to navigate these treacherous waters.

Egorov's persistence eventually paid off as he secured a lifeline of $46 million. With unwavering determination, he transferred 106 million CRV to select buyers, effectively extinguishing the fires of what would later be dubbed the "Curve Wars."
The journey of Michael Egorov, from the brink of financial turmoil to his remarkable redemption, serves as a testament to the resilience and ingenuity that define the world of cryptocurrencies. As the crypto landscape continues to evolve, Egorov's story reminds us that in this realm, fortunes can change in the blink of an eye. In the face of adversity, innovative solutions emerge, and the path to redemption is paved with unwavering determination. The crypto world eagerly awaits the next chapter in this captivating saga, as it continues to redefine the boundaries of possibility.

Read more: Breaking Down Marathon's Recent Bitcoin Block Mishap: A Lesson in Adherence to Blockchain Consensus Rules

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