After the CRV liquidation, will CVX become the first choice for whales to buy bargains?

Last week, DeFi ushered in the biggest turning point of this cycle. CRV continued to fall to a low of $0.219, and founder Michael Egorov’s lending positions were gradually liquidated. According to Arkham, in less than half a day, Michael’s entire loan positions across five protocols, worth $140 million, were liquidated.

While CRV is currently seeing a recovery in price, it’s CVX that’s most notable. On June 17, according to Binance market data, CVX briefly rose to $4.66 and then fell back, rising by more than 90% in 24 hours.

Is CVX the first choice for whales to hunt for bargains?

Michael Egorov said in an interview with CoinDesk that the liquidation was triggered by the UwU Lend breach. But unlike in the past, when CRV fell, Michael did not cover his position in time, but allowed a series of liquidations to occur. Because the size of Michael's position was too large, the market could not handle it, resulting in 10 million bad debts.

In order to eliminate the negative impact of the accumulation of bad debts on the market as soon as possible, on the evening of June 13, Christian, the co-founder of the crypto fund NDV and the NFT whale, posted on social media. Obtain 30 million CRV from Michael.

In addition to helping Michael repay the loan, Christian also said that Curve was under pressure because Michael obtained liquidity in advance that ordinary project parties could not obtain. Now that the liquidation is completed, it means that Michael has finally sold out all his liquidity. Christian believes that "there will be no secondary market selling pressure before at least 2028."

#This also means now is a good time to buy CRV at the bottom, and the market is behaving that way. According to data from the Binance platform, when CRV hit bottom at $0.219, the trading volume of the CRV/USDT spot trading pair reached 463 million pieces (with a trading volume of $111.5 million) in just one hour, setting a record for the trading pair in history. At the same time, CRV also topped the Smart Money 24-hour inflow list for two consecutive days.

As the largest stablecoin exchange protocol on Ethereum, most DeFi relies on Curve, and the Curve protocol remains valid and immutable. It’s reasonable to speculate, then, that Michael’s liquidation could mark the beginning of DeFi’s comeback.

On June 17, Curve Finance officially issued a statement stating that the funds flowing into veCRV last week were already 6 times that week’s inflation. These inflows include direct staking, as well as staking via Convex Finance, Stake DAO, and Yearn. This is the highest weekly inflow to CRV locked in recent years.

As one of the three major agreements that started the Curve War, Convex Finance TVL reached US$1.316 billion as of writing, accounting for half of Curve (US$2.285 billion). This also means that Convex’s chips are relatively concentrated, and The giant whales have naturally set their sights on Convex Finance.

In addition to the aforementioned Christian, Kennel Capital member Zoomer Oracle also made it clear that he bought CVX at 2.05. Zoomer Oracle believes that CRV/CVX is undervalued and that “Convex is a beta of Curve with simple 5x potential.”

In addition to CVX, what other targets does the Curve ecosystem have?

Michael’s loans are gone, the market is no longer suffering from PTSD, and bad debt has been cleared, DeFi may have turned a corner.

In addition to the various DeFi protocols in Curve War, such as Stake DAO, Yearn Finance, Olympus and Frax, which are stable protocols, the gameplay of each protocol can be seen in the "Curve War Upgrade CVX Battle, the exciting power struggle is still there" continue". Another application scenario of the Curve protocol is to support stable currency projects through Curve 3pool (DAI/USDC/USDT fund pool).

According to Curve data, the current 3pool transaction volume and TVL data are less than one million, which means that the possibility of some more mainstream stablecoins using Curve transactions is low, but the liquidity of the Curve protocol itself can still support Small stablecoin project.

Currently, the modular market is gradually emerging, and modularization will lead to an increase in chains. In order for each chain to continue to develop application scenarios, stable coins may become a necessity. Then, Curve 3pool can provide certain liquidity to these stablecoins, especially algorithmic stablecoins. Of course, since Curve 3pool uses CRV as a reward, this requires CRV itself to have sufficient value.

After the liquidation, Michael said that the incident may help strengthen Curve’s security measures and lending mechanisms, and may create better services for users in the coming months. And whether this can really allow the Curve flywheel to take off again remains to be judged by time.

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