Michael Egorov Reaffirms Commitment to Curve Amidst Financial Setbacks

Michael Egorov, the founder of Curve Finance, has recently faced significant financial turbulence with the liquidation of over 100 million regular CRV tokens due to margin calls. Despite this, Egorov has expressed his unwavering commitment to the project, emphasizing that his exposure is now primarily through vote-escrow (ve) CRV tokens, which align his interests closely with the project’s success through game theory incentives.

Egorov took to Twitter to reassure the community, stating, “In case anyone is wondering, I am committed to building Curve more than ever, thanks to game-theoretical implications of veTokenomics (mostly have veCRV now).” His focus remains on enhancing Curve’s protocol, particularly its lending and borrowing products, to make them the safest in the industry.

He also plans to educate arbitrage traders on executing orderly liquidations and to design mechanisms that incentivize users to deposit crvUSD—Curve’s native stablecoin.

VE tokens, central to this strategy, are non-transferable assets that offer governance power proportional to the duration for which they are locked. This model was a key factor in the “Curve Wars” of 2021, where DeFi protocols vied to direct CRV rewards to their liquidity pools, thereby boosting liquidity.

Recent events highlighted by Arkham Intelligence and Lookonchain revealed the precariousness of Egorov’s financial position. Before the liquidation, Egorov had $95.7 million in stablecoin loans backed by $141 million in CRV. A subsequent 20% drop in CRV’s price triggered liquidations, reducing his positions significantly. Following this, the price of CRV fell 36% over seven days but rebounded by 14% after Egorov’s liquidation, reflecting the volatile market dynamics.

Critics and observers have mixed views on Egorov’s financial maneuvers. While some, like Ethereum developer Eric Conner, suggest that Egorov managed the situation without severe personal financial harm, others, like Anthony Sassano, feel the community bore the brunt of the fallout. Further stirring the pot, Lookonchain reported that Egorov had cashed out a significant amount in 2023, allegedly funding the purchase of a $41 million mansion in Melbourne.

Despite these controversies, Egorov’s recent actions and communications underscore a strong commitment to Curve’s development and the broader DeFi ecosystem, aiming to solidify its foundation amidst market fluctuations and personal financial challenges.