Opinion: If Curve "deaths" the DeFi market will need to go through a long recovery period

Author: Vic TALK; Source: Author twitter@victalk_eth

My personal views on Curve’s liquidation incident: the most dangerous liquidation test period is now over.

The debt on Fraxlend has been paid off a lot, and now there is 910w left, which seems to be at a healthy level at present.

This crisis is entirely the founder Michael’s personal reasons.

Although he sold coins through OTC to repay the money today, compared to his price, he still made money.

Michael’s huge Crv position on the chain not only caused today’s liquidation situation, but also bound the price of Crv to most of the defi. Once the liquidation of crv really happened, not to mention the high probability that the entire crv ecology would be over. Lending agreements such as AAVE will also have a large amount of debt owed.

Once Curve is over, the loss for defi will exceed 60%-70%, and the recovery period will be quite long.

The power of individuals can affect the trend of the entire industry, which is really ironic for the “decentralized” Web3 industry.

OTC selling coins solves the urgent need, but it may plant a bigger disaster.

A large part of the reason why crv did not continue to hit today is because there are no bargaining chips in the market. Today, Michael sold 54.5 million crvs to various masters, which is equivalent to sending out chips. The next time there is a crisis, it is hard to say whether the price of crvs will drop rapidly.

These OTC purchasers are not all to save Curve. After all, the price of 0.4 US dollars is quite attractive, and they are basically interested parties. The six-month lock-up clause is not a smart contract, so it is not ruled out that some people directly smash the market.

Discuss the facts as they are, and don’t talk about other things regardless of the facts.

No matter what reason Curve was attacked, it is responsible and wrong. If you do something wrong, you have to endure being beaten. You can’t criticize others while throwing blame. This is not a good attitude.

I hope that Curve can survive this crisis smoothly. In all aspects, I am still very optimistic about the Curve product itself and its economic model design.