CRV continues to lose ground: Will domino effect have an impact on other cryptocurrencies
CRV continues to lose ground: Will domino effect have an impact on other cryptocurrencies
A major hack of Curve Finance, a DeFI platform, has caused a serious collapse in the prices of some DeFi tokens on the market.
Curve Finance's native cryptocurrency, CRV, has plummeted 30% since the platform was hacked on Sunday night. Curve founder Mikhail Egorov was forced to take out a $100 million loan using the $427.5 million in CRV as collateral.
Investors' contingent interest in perpetual futures on CRV rose to $106 million, along with extremely negative funding rates, a sign of betting on a downgrade, according to Coingape.
The concern is the possibility of a further fall in the CRV price, which would trigger a forced liquidation of credit positions.
"If the price falls further, these liquidation levels will be reached, and we could see a domino effect across the DeFi sector," he commented.
Curve Finance is the second-largest DEX after Uniswap. Cryptocurrency volumes on Curve Finance have now fallen from $3.6 billion to $1.9 billion.
Mikhail Egorov is confident that the DeFi sector will survive these difficulties: "The company and I personally are working to minimize the impact of the hack". He also said that he plans to reduce his loans.
The Curve hack caused a significant drop in major DeFi tokens, as Curve Finance is considered one of the most important liquidity providers, especially for stablecoins. Over the past 24 hours, COMP plunged 18% to $61.98, CVX fell 14% to $2.94, FXS fell 13% to $5.16, and AAVE fell 12.63% to $62.14.
It is reported that a significant amount of collateral could be liquidated if the CRV token falls below 37.5 US cents.
The other cryptocurrencies are also under heavy pressure amid CRV's decline. Bitcoin's price has fallen below the $29,000 level, while the major altcoins have also lost between 2 and 5 percent.
Previously, Curve Finance faced new losses.
