Just two months after Curve, a stablecoin decentralized exchange (DEX), was compromised in late July 2023, trading volumes connected with CRV, the governance token, are down 97%. Kaiko claims that as of September 12, the trading volume of CRV on centralized exchanges, particularly Binance, where the cryptocurrency is widely traded, had decreased from approximately $300 million in late July to $7 million.
CRV can be traded on a number of centralized and decentralized exchanges, including Binance, Uniswap, and Curve, according to trackers. The majority of CRV trade was concentrated on Binance, the most well-known cryptocurrency exchange in the world, due to its popularity and liquidity position.
For example, Bitbox comes in second with a dominance of approximately 7%, while Binance has over 20% of the CRV trading market at the time of writing.
Curve’s TVL, Price, And Trading Volumes Collapse
In the world of cryptocurrencies, a decline in trading volume frequently signals investors’ overall caution or declining interest in a particular digital asset. With declining volume, the asset’s liquidity suffers as traders or investors prefer stability and refuge above risk, even liquidating the coin. They may occasionally choose to take a wait-and-see stance as they assess how the token will respond to shifting market circumstances.
DeFiLlama estimates that Curve’s total value locked (TVL) is about $2.17 billion, down from $3.25 billion at the time the protocol was compromised. The general slump in the decentralized finance (DeFi) landscape coincides with the drop in TVL and trading volumes.
The Hack And Erogov’s CRV Disposal
Malicious actors employed outdated versions of Vyper, a computer language used to build smart contracts on Ethereum, in the July hack to take advantage of several Curve stablecoin pools. Because Curve’s pools are completely automated, hackers were able to deplete several pools by using a re-entry assault.
In response to this hack, CRV fell rapidly, dropping from approximately $0.74 to $0.48 on July 30. Since then, it has more than halved, plummeting to $0.40, a new low for 2023.
When prices started dropping, Curve’s CEO, Michael Egorov, was forced to liquidate the CRV holdings he had been using as collateral for OTC loans to companies and people like Justin Sun. Egorov had borrowed money from Aave and Frax Finance using CRV as security.
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