DeFi Heavyweight Curve Focused on Becoming ‘Safest’ Lending Platform, Founder Says

As a researcher with experience in the DeFi (Decentralized Finance) space, I’m deeply concerned about the recent events involving Michael Egorov and Curve Finance. The exploit of UwU Lend on Monday triggered a chain reaction that led to multimillion-dollar liquidations on Curve, resulting in significant losses for users, including Egorov himself.

On Monday, the discovery and exploitation of UwU Lend initiated a chain reaction resulting in multimillion-dollar liquidations on DeFi lending titan Curve, as confirmed by Curve’s founder Michael Egorov’s representatives via Telegram messaging to CoinDesk on Friday.

As a researcher studying decentralized finance (DeFi), I came across an intriguing case concerning Egorov’s substantial loans totaling $100 million, which he had obtained from various protocols using CRV tokens from Curve Finance. Unfortunately, on Thursday, these loans began to automatically liquidate due to market conditions. The sudden liquidation sent the CRV token plummeting as much as 30% before experiencing a brief recovery.

The root cause of the bad debts and liquidations can be attributed to UwU Lend, a cryptocurrency protocol enabling users to borrow, lend, and stake tokens.

“On April 15, UwU Lend introduced vulnerable code for their new sUSDe markets, putting the entire platform at risk since these markets are interconnected. Egorov explained that UwU was breached, and the hacker transferred CRVs stolen from UwU to lend.curve.fi (LlamaLend) as part of a cash-out strategy, then vanished with the funds, leaving behind an outstanding debt in the system.”

I, as an analyst, would rephrase that as follows: On Monday, my analysis reveals that UwU Lend suffered a significant loss to the tune of $20 million due to a flash loan assault. An unfortunate event repeated itself on Thursday, resulting in an additional loss of $3.7 million through another attack. In response, the company has announced a reward of $5 million to identify and apprehend those responsible for the attacks.

In a recent post on the X platform, Egorov calculated that there was approximately $10 million worth of bad debts in a specific CRV lending pool. Despite being separate from other lending pools, depositors were unable to retrieve their funds until these bad debts had been resolved.

Egorov pointed out that this predicament might strengthen Curve’s security protocols and loan structures, ultimately enhancing the user experience within the next few months.

Yesterday, under extraordinary circumstances, Egorov confirmed that the system was put to the test. Significant analysis is ongoing, yet what’s crucial is that we possess all necessary data to create the safest and most robust lending/borrowing platform in existence.

“My commitment is to make deposit withdrawals smooth and hassle-free for all users. Above all, I prioritize Curve Finance, and our community holds the greatest significance.”

According to DefiLlama’s latest figures, Curve ranks among the biggest crypto protocols with approximately $2 billion worth of assets secured as of last Friday.