The CRV token issued by the Curve decentralized trading protocol was shorted by massive whales earlier, with a low of $0.4, but has since experienced a short squeeze, with a high of $0.736. A large number of the giant whale’s jobs in Aave were also liquidated, leaving bad debts of even 2.64 million CRV.
(Review:“Survival War Challenge” Curve attacker lent 92 million CRV! Aave lending rates rise almost 1,500%)
(background attachment:Giant whale hits Curve! Borrow $30 million CRV to sell short, the token has plunged 22%)
verb: to moveDistrict reported yesterday (22) that a giant whale (0x57) borrowed 30 million CRV from the Defi Aave protocol and transferred it to the OKX exchange in three sections. He wanted to shorten the CRV token by repeatedly borrowing tokens from Aave . According to data from Binance, the price of CRV reached as low as $0.4 at around 18:45 yesterday, and fell 25% in one afternoon.
But just when investors were worried about whether they would continue to break the market, there was a big short squeeze, and the big short-selling whales suffered heavy losses and were liquidated!
After the founder of Curve.fi reported buying 20 million CRV as collateral in the early hours of yesterday morning, the price of CRV rebounded slowly, and at about 01:45 this morning, there was a wave of rapid increase, and the highest price of CRV it piled up It hit $0.736, a surge of almost 46% in six hours.
Before the deadline, it was reported to be US$0.654. In the end the health index on the Curve protocol, which had fallen rapidly, and a large number of CRVs facing liquidation, returned to normal.
Aave: The giant whale’s CRV situation was liquidated on a large scale, but CRV’s 2.64 million bad debts were left behind
In the wake of CRV’s rapid rise, the giant whales that were aggressively cut short yesterday are being wiped out on a large scale.
According to Aave’s tweet early this morning (23rd), the giant whale’s mortgage loan situation has been liquidated, but there are still 2.64 million CRV bad debts (about 1.7 million US dollars at the current price) .
(It is reported that within a week the giant whale lent a total of 92 million CRV and mortgaged 63.6 million USDC)
Aave further explained that “the dissolution was successful.” Most of the large CRV loans accumulated by this giant whale have been liquidated through the agreement process, but unfortunately they have not been fully included so that the excess debt occurs (<0.1 %), but emphasizes that there will be a subsequent supporting mechanism for processing.
A number of mechanisms are used in building the Aave ecosystem, including security modules, ecosystem pools, and DAO libraries. In the coming days, we believe that the Aave community and its contributors will start discussions about this event. Community contributor @monetsupply also opened a discussion on the Governance Forum regarding the review of long-term asset risk in the Aave V2 marketplace.
1/6 We want to address the cycle of liquidation that occurred in the CRV pool on the Aave Protocol today. The liquidation was successful (and worked as planned), but unfortunately, the scale of the situation left some outstanding debt within the protocol.
— Aave (@AaveAave) November 22, 2022
Short or deliberate squeeze?
Currently, according to Debank data, the assets in the wallet reached USD 41.8 million yesterday evening, but now only USD 896,000 remains, quickly evaporating more than 97%. In this regard, many netizens said that they were revived to see that the giant whale was trying to shorten CRV, an important contributor in the field of Defi, but it was abolished in large numbers.
However, some netizens speculated that since it is not clear whether the huge whale has hedged on the central exchange or other platforms, the entire short crunch market is suspected to have been directed and operated by him. After lending a large amount of CRV to break the market and create panic, he took profits and then bought with the crowd to raise the price, and he had no plan to return the situation in Aave.
Regardless of the dynamic zone, we still need to remind that the current CRV fluctuates violently, and pay attention to related risks before investing.
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