Major DeFi protocol Curve Finance could face another hurdle in February as founder Michael Egorov still has outstanding debt.
Analyst DeFi Made Here pointed out the $100 million debt of Egorov in August, secured by CRV token as something that might endanger stability for this protocol.
After August’s $62m con Egorov must have borrowed a further $75 million in October. 231 million CRV tokens traded OTC in August with a handshake agreement to be held until February adds more tension.
Making things even more complicated is DeFi developer Michael Patryn, who acts as a liquidity provider for Egorov’s loans.
Patryn would perhaps “remove funds and short CRV,” further escalating the crisis as Egorov’s loans liquidate, triggering collapses throughout Curve’s ecosystem.
According to DeFi Made Here , this is a “stress test” scenario for Curve. It is also possible to have a more positive outcome. Patryn may decide to pay back his debt and keep on funding Egorov, thus minimizing the effect.
However, Curve’s recent status, which already has more than 1.6 billion locked assets, showcases its strength despite the issues it raises.
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