Curve founder Michael Egorov’s 111 million $CRV lending position fell below the liquidation line today, with over 50 million $CRV on Inverse and UwU Lend platforms being liquidated. This led to a 40% drop in the price of $CRV within an hour, hitting a low of $0.2. Meanwhile, what arbitrage opportunities do we have?
Michael Egorov’s 140 million pounds of CRV collateral is once again approaching liquidation, with Arkham: only a 10% drop space left…
In the morning of the 13th, the stablecoin exchange protocol Curve founder Michael Egorov’s $CRV lending position, valued at 140 million dollars, has approached the liquidation threshold, resulting in a further decline in the CRV price. Michael Egorov’s lending position was liquidated around 11 a.m. this morning.
Lookonchain statistics show that Michael Egorov’s health factor on Inverse, UwU Lend, Fraxlend, and Curve LlamaLend platforms are all below 1, with over 111 million $CRV (about 33.87 million dollars) below the liquidation line.
The first to be liquidated was $CRV on the Inverse platform, followed by $CRV on UwU Lend, with over 50 million $CRV already liquidated.
Meanwhile, at the same time as Michael Egorov’s liquidation, the on-chain data showed that the $CRV price dropped to a low of $0.2, down more than 40% in an hour. At the time of writing, OKX spot price is $0.279, still down 23% in the past 24 hours. However, smart players also seized this opportunity to profit.
According to community KOL Ai, the address starting with 0xF07 is one of the main liquidators. This address spent 7.55 million FRAX stablecoins to liquidate 29.62 million CRV at an average price of $0.2549. The $CRV obtained through liquidation has been deposited into Binance at an average price of $0.2792, potentially making a profit of 720,000 US dollars if sold at that price.
However, Ai also added that if the liquidator opens a CRV short position on Binance (or borrows tokens to sell) before liquidation, the obtained CRV will only be used to close the short position (or repay the loan), without having to bear the profit or loss from the fluctuation in the token price during the period. Therefore, the aforementioned profit of 720,000 US dollars is only for reference and could be higher in reality.
On the other hand, on-chain analyst Yu Jin found that an address exploited the price difference between on-chain Dex and centralized exchanges for $CRV to achieve around 10% arbitrage. He pointed out that besides $CRV, Curve’s stablecoin $crvUSD also had abnormal pricing at one point, presenting arbitrage opportunities. Ai noted that the $crvUSD price spiked to $1.07 at 10:30 this morning.
Market maker Wintermute took advantage of the opportunity to sell 9.29 million crvUSD for USDC at an average price of $1.06779, making a profit of about 630,000 US dollars. These crvUSD were bought by the institution yesterday morning at an average price of around $0.9984.