- Institutional investor suffers $4.5M loss selling 25M CRV tokens.
- CRV price volatility highlights risks of crypto investments.
- Convex Finance solidifies DeFi dominance amid Curve’s challenges.
An institutional investor incurred a heavy loss after selling 25 million Curve DAO Tokens (CRV) in the last three days. Data from Lookonchain revealed that the whale purchased the tokens from Curve Finance founder Michael Egorov at an over-the-counter (OTC) price of $0.40 per CRV, for a total of $10 million.
Subsequently, they sold the entire 25 million CRV stash at an average price of $0.22, resulting in a loss of $4.58 million. The identity of the institution remains undisclosed.
Curve, a decentralized exchange for stablecoins, had launched a decentralized autonomous organization (DAO), with CRV as its native token. This development underscores the inherent risk associated with holding a large position in volatile crypto assets.
The subsequent price decline in the CRV token following the massive sell-off highlights the market’s sensitivity to such large-scale liquidation events.
Meanwhile, Convex Finance, the DeFi protocol built on Curve, has solidified its position as a dominant force in the Curve ecosystem. With over 50% of all vote-locked CRV under its control, Convex Finance exerts significant influence over the protocol’s governance decisions.
The platform also boasts control over 52% of vote-locked Prisma (PRISMA), 33% of vote-locked Frax Share (FXS), and 46% of vote-locked Frax (FXN). This extensive governance power across multiple protocols allows Convex Finance to allocate approximately $25 million in annual emissions based on current prices and emission rates.
Convex Finance token holders can benefit from this influence by locking their CVX tokens for varying periods, granting them voting rights on how a portion of the $25 million in emissions is directed. This mechanism provides CVX holders with an additional passive income stream, estimated to be around 15% APR at present.
The massive liquidation of 25 million CRV serves as a stark reminder of the risks inherent in crypto investments while also highlighting the growing popularity of DeFi protocols.
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