I've read 100s of tweets about the Curve liquidation & it doesn't look good! -- Here is why Curve is about to implode (And how you can profit from that) π
The story starts at the End of May 2023:
Michael Egorov, co-Founder of @CurveFinance purchases two gigantic mansions worth around $40m.
This is a lot of money, but it is about to get very strangeπ
Michael Egorov, co-Founder of @CurveFinance purchases two gigantic mansions worth around $40m.
This is a lot of money, but it is about to get very strangeπ
In order to purchase the mansion Michael took out a huge loan on @AaveAave.
He deposited $177m in $CRV tokens (~30% of the supply) & took out almost $70m in stablecoins.
But wait the story gets even crazier π
He deposited $177m in $CRV tokens (~30% of the supply) & took out almost $70m in stablecoins.
But wait the story gets even crazier π
As if that wasn't enough Michael took out additional loans on various other lending markets.
β’ $14m on Abracadabra
β’ $10m on Fraxlend
β’ $7m on Inverse
All of his loans total up to a debt of more than $100m!
It comes worse because this money is on the brink of liquidation.
β’ $14m on Abracadabra
β’ $10m on Fraxlend
β’ $7m on Inverse
All of his loans total up to a debt of more than $100m!
It comes worse because this money is on the brink of liquidation.
Remember that Curve was exploited a few days ago?
The lack of liquidity resulted in a steep decrease in the price of $CRV.
Effectively bringing Michaels's positions very close to liquidation.
But wait it gets EVEN WORSE from here π
The lack of liquidity resulted in a steep decrease in the price of $CRV.
Effectively bringing Michaels's positions very close to liquidation.
But wait it gets EVEN WORSE from here π
As described earlier Michael has an open debt position on Fraxlend which is worth roughly $10m.
Frax works with a Time-weighted interest rate.
Since the price of $CRV fell so much, the Frax algorithm is exponentially increasing the interest leading to even more debt.
Frax works with a Time-weighted interest rate.
Since the price of $CRV fell so much, the Frax algorithm is exponentially increasing the interest leading to even more debt.
Michael has to repay the FRAX loan ASAP, before the interest rate skyrockets.
If he doesn't succeed to repay the debt, it will trigger a liquidation cascade that liquidate his Aave loan ($60m) as well.
More & more people are shorting $CRV in order to liquidate Michael.
If he doesn't succeed to repay the debt, it will trigger a liquidation cascade that liquidate his Aave loan ($60m) as well.
More & more people are shorting $CRV in order to liquidate Michael.
Michael is trying to find funds in order to repay his loan.
In recent hours he has been doing various OTC deals worth almost $20m.
He is selling $CRV tokens way below market price to wealthy individuals such as Justin Sun & Machi Big Brother.
In recent hours he has been doing various OTC deals worth almost $20m.
He is selling $CRV tokens way below market price to wealthy individuals such as Justin Sun & Machi Big Brother.
Now, how can you profit from all of this?
There are two likely scenarios:
1) A massive $CRV dump
2) A gigantic $CRV short squeeze
Either way, there will be a huge move in my opinion.
As soon as the market tips in either direction you can make your trade.
Stay safe!
There are two likely scenarios:
1) A massive $CRV dump
2) A gigantic $CRV short squeeze
Either way, there will be a huge move in my opinion.
As soon as the market tips in either direction you can make your trade.
Stay safe!
A tweet from Justin Sun, he is supporting Michael π
By the way, I took the cover Image from Blockpour.
They are building an amazing tool for on-chain analysis.
Check it out!
They are building an amazing tool for on-chain analysis.
Check it out!
Loading suggestions...