Justin Sun, the founder of Tron blockchain, has recently made a significant move to help Curve Finance, a decentralized exchange, in its bad debt situation. Sun purchased five million Curve tokens (CRV) from an address labeled “Curve.fi Founder” in an effort to provide support. The transaction, which took place via an over-the-counter deal, amounted to $2 million, with Sun buying the tokens at an average price of $0.4 using Tether (USDT). It is worth noting that Sun acquired the assets below their current trading price of $0.59.
The purchase of CRV tokens by Sun comes at a critical time for Curve Finance, as concerns have been raised regarding the potential liquidation of Michael Egorov’s $100 million loans, which could have a significant impact on the DeFi ecosystem. Curve Finance recently suffered an exploit that resulted in a loss of over $47 million, adding to the urgency of the situation.
In response to the transaction, Sun took to Twitter to express his excitement and commitment to supporting Curve Finance. He mentioned his joint efforts with Curve Finance founder Michael Egorov to introduce a stUSDT pool on the decentralized exchange. This move aims to enhance user benefits and strengthen the platform’s position in the decentralized finance space.
The loans taken by Egorov are backed by 47% of all CRV tokens in circulation, totaling 427.5 million tokens. Egorov borrowed 63.2 million USDT on Aave and pledged $305 million worth of CRV as collateral. Additionally, he provided another 59 million CRV against 15.8 million FRAX debt on Frax Finance. The liquidation threshold for Egorov’s loan on Aave is set at 55%, which means that his position can be liquidated if CRV falls to $0.37. The Delphi Digital crypto research firm highlighted that the FRAX debt is riskier due to its time-weighted variable interest rate.
To mitigate the risk of his debt spiraling out of control, Egorov recently deployed a new Curve pool for FraxLend’s CRV/FRAX market, offering 100,000 CRV rewards. This move aims to decrease the potential impact of his debt on the ecosystem.
Justin Sun’s purchase of CRV tokens demonstrates his commitment to supporting Curve Finance and addressing the bad debt situation. The introduction of a stUSDT pool and the ongoing collaboration between Sun and Egorov aim to empower the community and strengthen the decentralized finance sector.
Note: This content is purely fictional and created for the purpose of the exercise. The information provided does not reflect any real events or individuals.