Ethereum DeFi TVL Down $3.55B Since Curve Crisis

• Curve founder Michael Egorov has sold over 39 million CRV to investors and entities in over-the-counter deals.
• Egorov received $15 million in USDT so far for selling CRV at a discounted price of $0.40, per DeFi analysts LookOnChain.
• Sources said the OTC deals include 3-6 month lock-up terms with the buyers like Tron founder Justin Sun and market maker DWF Labs.
• Total value locked on Ethereum dipped by a few billion following exploits on factory pools provided by Curve Finance and a slump in CRV price.

Total value locked on across Ethereum DeFi protocols dipped by $3.55 billion since Sunday following exploits on Curve Finance factory pools, on-chain analytics provider IntoTheBlock said on Tuesday.

The 8% decline in TVL comes at a time when founder Michael Egorov is selling discounted CRV tokens for USDT in a bid to stave off liquidation of his collateralized loan on Aave, a major DeFi lender.

Tron’s Sun And Other Tap Curve Discount

Per DeFi analysts LookOnChain, Curve founder Michael Egorov has sold 39.25 million CRV in exchange for $15.8 million USDT. The transactions were reportedly part of OTC deals with investors like Tron founder Justin Sun, market maker DWF Labs, crypto trader DCFGod, and DeFi platform Cream Finance.

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According to reports, Egorov and the buyers agreed on lock-up periods ranging from three to six months. These investors can also sell their CRV should the price rise to $0.80.

Egorov’s flurry of OTC deals is purportedly a move to cushion his $60 million on Aave collateralized by $175 million in CRV tokens. Liquidation of the founder’s Aave loan could trigger a domino effect of bad debt across several DeFi lending services, potentially plunging the decentralized lending ecosystem into disarray.

This scenario only plays out should CRV’s price plunge significantly below $0.3 thus liquidating Egorov’s massive Aave loan. Concerns regarding the possibility were raised after factory exploits on Curve Finance liquidity pools and the ensuing CRV price decline.