CDS Crypto News Aave Takes Action CRV Borrowing from Curve Finance Off Limits
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Aave Takes Action CRV Borrowing from Curve Finance Off Limits

Aave proposal to prohibit Curve Finance CRV borrowing officially passed.

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Aave Takes Action CRV Borrowing from Curve Finance Off Limits

In a resolute move, the Aave community has given full support to a proposal that prohibits any further borrowing against Curve DAO Token (CRV). The decision to block CRV borrowing was proposed by the risk management firm Gauntlet as a safeguard against potential liquidation risks posed by the debt of Curve Finance founder, Michael Egorov. Gauntlet’s Proposal 286, titled “Gauntlet Recommendation for CRV LTV -> 0 on Aave v2 Ethereum,” received a unanimous “Yes” vote from the community, garnering a 100% support rate.

Aave Takes Action CRV Borrowing from Curve Finance Off Limits

The risk management firm has been scrutinizing the borrowing behavior of Curve Finance founder, Michael Egorov, who currently has around $54 million of USDT debt secured against $158 million worth of CRV tokens. However, there is a positive development as Egorov is diligently paying off his $80 million debt through over-the-counter (OTC) sales of CRV tokens.

Presently, there is an outstanding loan of approximately $29 million of USDT against $116 million of CRV on Aave, according to DeBank data. The situation is compounded by the recent $61 million hack suffered by Curve Finance pools. While the hacker has begun returning funds, the DeFi platform has decided to pursue legal action, given that the deadline for voluntary fund return has elapsed.

Amidst these developments, Michael Egorov’s efforts to repay his debt through OTC sales of CRV tokens have made significant progress, with almost half of the $80 million debt already paid off. As a result of this positive news, the CRV token experienced a 10% surge in price on Saturday.

The Aave community’s decision to halt additional CRV borrowing aims to mitigate potential contagion risks and safeguard the DeFi ecosystem against any potential crashes, demonstrating a proactive approach toward risk management and financial stability.

About Curve Finance

Curve Finance is a decentralized exchange and automated market maker. It has garnered significant attention due to its focus on facilitating stablecoin trading. Through Curve, users can swap stablecoins at the most favorable prices and with minimal transaction fees.

About Aave Coin

Aave (AAVE) is a cryptocurrency that is built on the ERC-20 standard, forming the foundation of the Ethereum blockchain network. It is an open-source project. The AAVE tokens were previously released under the name LEND tokens, and in October 2020, the project underwent a token name change, offering 1 AAVE for every 100 LEND tokens held by token holders.

Aave Takes Action CRV Borrowing from Curve Finance Off Limits
Sources:coingape

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