Binance Labs, the venture capital incubation arm of leading cryptocurrency exchange Binance, announced yesterday (10) that it has pledged to invest $5 million in the purchase of Curve DAO Token (CRV).

Binance has become the latest member of the Curve liquidation crisis rescue team. According to the on-chain data monitoring account Lookonchain, Binance Labs has spent $5 million in USDT today to purchase 12.5 million CRV from Curve founder Michael Egorov. The purchase price of each CRV is $0.4, which is lower than the market price of $0.60 before press time.

CRV surged 7.7% intraday

After the good news about Binance's investment in CRV tokens came out last night, the price of CRV rose by nearly 7.7% within 1 hour, and was reported at US$0.609 before press time, down 0.6% in the past 24 hours.

Curve will expand to BNB chain

Binance said that the investment in Curve symbolically highlights Binance Labs' commitment to working with Curve and shaping the future of the DeFi field. "As part of the cooperation, Curve, which currently operates on multiple chains, will plan to deploy to BNB Chain. As the base layer of DeFi, this move will further promote the development of the BNB Chain DeFi ecosystem."

He Yi, co-founder of Binance and head of Binance Labs, said:

Curve is the largest stablecoin and as a key protocol in DeFi, it has contributed to the steady growth of the sector in 2023.

In light of recent events affecting the protocol, Binance Labs offers its full support to Curve through investment and strategic collaboration. We see this collaboration as a starting point and look forward to working together to further advance the DeFi ecosystem.

Curve liquidation crisis extinguished

The participation of Binance has further eased Curve's earlier liquidation crisis. Curve was hacked at the end of July and lost up to $73.5 million. After Curve promised to set aside 10% of the stolen funds as a bonus, the hacker has returned about $52.3 million in assets (73% of the stolen funds), and currently about $19.7 million in assets have not yet been returned.

But what attracted the attention of the entire cryptocurrency field in this incident was the potential liquidation crisis of CRV. The fuse was that Curve founder Michael Egorov used a huge amount of CRV as collateral to borrow on multiple lending platforms such as Aave. After the price of CRV plummeted due to a vulnerability attack, Egorov's multiple lending positions were on the verge of liquidation.

According to Lookonchain statistics, Egorov has sold a total of 156 million CRVs to 32 institutions/buyers through OTC at an average price of $0.4, and obtained $62.5 million in funds to repay debts.

Debank data shows that Egorov currently has 238 million CRV collateral on multiple lending platforms such as Aave, Fraxlend, Inverse, Silo, Cream, etc., worth about $135 million, and $48.96 million in debt. At present, the health of his collateral on major DeFi platforms has been greatly improved, and the health coefficient of the main lending position on Aave V2 has risen to above 2.17 (the health coefficient will be liquidated if it is lower than 1).