Opinion If Curve dies, the entire DeFi market will need a considerable recovery period.If Curve dies, DeFi will need a significant recovery period.
Author: Vic TALK; Source: Author’s twitter@victalk_eth
Here are my personal opinions on the liquidation event of Curve: The most dangerous period of liquidation test seems to have passed.
A lot of debts on Fraxlend have been paid off, and now there is only 9.1 million left, which seems to be at a healthy level.
This crisis is completely due to the personal reasons of the founder Michael.
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Although he sold coins through OTC today to repay the debt, it is still profitable compared to the price he bought them at.
Michael’s massive Crv position on the chain has not only caused today’s liquidation situation, but also tied the price of Crv and a large part of the defi together. Once Crv is really liquidated, not to mention that the entire Crv ecosystem is likely to be finished, there will also be a large amount of debt on lending protocols such as AAVE.
If Curve is finished, the loss for defi will exceed 60%-70%, and the recovery period will be quite long.
The power of individuals can influence the trend of the entire industry, which is truly ironic for the “decentralized” Web3 industry.
Selling coins through OTC solved the urgent problem, but may also lay down bigger troubles.
One of the main reasons why Crv did not continue to plummet today is because there are no chips in the market. Michael sold 54.5 million Crv to various investors today, which means the chips have been sent out. Next time a crisis occurs, it is uncertain whether the price of Crv will plummet rapidly.
Not all the people who bought OTC are for saving Curve. After all, the price of $0.4 is quite attractive, and they are basically stakeholders. The six-month lock-up clause is not a smart contract, so it is not ruled out that some people may directly dump their holdings.
Let’s stick to the facts and discuss the matter at hand instead of talking about other things.
No matter what the reason for the attack on Curve, it is responsible and has made mistakes. If you make a mistake, you should endure it instead of blaming others and attacking them. This is not a good attitude.
I hope Curve can successfully overcome this crisis. Personally, I have great confidence in Curve’s product itself and its economic model design.
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