Will the Curve DAO Token (CRV) crisis deepen? Now there is this question in mind. Because there is a rumor of a black swan event around. Black swan means black swan. Today, it is used to describe surprise events that cannot be predicted in financial markets, cannot be explained by rational analysis, and have a significant impact.

Black swan activity risk and CRV crisis
CRV price is approaching liquidation levels in Aave and other DeFi protocols. However, concerns about a potential black swan event are growing. Concerns are rising due to lack of liquidity to sell significant amount of Curve DAO Tokens (CRV). This creates the risk that some experts are calling a potential black swan event, summarized in a thread written by OlimpioCrypto on Twitter.
According to Defillama, the problem stems from the possibility of CRV falling below $0.37. In addition, this situation leads to the liquidation of 300 million CRV in Aave. Also, most of this purge comes from the founder of Curve. Curve's founder has invested 300 million CRVs as collateral in other lending protocols such as Aave. It also borrowed 60 million USDT. This approach was chosen because selling 60 million worth of CRVs on the open market would cause the price to drop.
Curve's status
Curve's situation was made worse by a recent vulnerability in Vyper that allowed hackers to hack some Curve repositories. This event caused the price of the CRV to drop. It also brought the credits, which were considered healthy, closer to the liquidation price. Lachlan Feeney says: “The price of the CRV token has dropped rapidly. Also, interest rates are rising due to lenders fleeing the ecosystem while trying to reduce risk. All this devalues Egorov's collateral. It also brings him closer to liquidation.” is emphasizing.
DeFi community is actively working
The DeFi community is actively working to address the CRV issue. Also, both Curve and Aave collaborate to find solutions. On the other hand, Feeney makes the following statement:
“If the debt really needs to be liquidated, there isn't enough liquidity in the system to facilitate the forced sale of $110 million of CRV tokens. That puts bad debts on credit platforms.”
Although a black swan event was not considered the most likely outcome, the non-zero risk triggered immediate action. If a protocol starts liquidating assets, the risk of cascading liquidation across the DeFi realm increases significantly. At this stage the community hopes to prevent any purges from starting.
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