CRV price crashes by 25% after Curve Finance loses $1.6 billion
- CRV price at the time of writing was down by 25%, trading at $0.548.
- Curve Finance faced an exploit on Sunday, which resulted in losses ranging from $20 million to $40 million.
- The developers decided to remove funds for safekeeping, resulting in the protocol losing $1.6 billion in 24 hours from the total value locked.
CRV price took a huge hit over the past two days as the Decentralized Exchange (DEX) that the token is based on faced an exploit. Curve Finance DEX not only lost a significant chunk of the total value locked (TVL), but it also led to a major sell-off of the token towards the end of July.
CRV price goes down due to Curve exploit
CRV price could be seen trading at $0.548 at the time of writing, down by more than 25% in the span of 48 hours. The DEX Curve Finance faced an exploit that was revealed on Sunday, during which approximately $20 million to $40 million was stolen from the protocol by hackers.
At the time of the hack, the development team tweeted,
“A number of stablepools (alETH/msETH/pETH) using Vyper 0.2.15 have been exploited as a result of a malfunctioning reentrancy lock. We are assessing the situation and will update the community as things develop. Other pools are safe.”
This was later updated to four different pools that were hacked because of the exploit.
As a result of an issue in Vyper compiler in versions 0.2.15-0.3.0, following pools were hacked:
— Curve Finance (@CurveFinance) July 31, 2023
crv/eth
aleth/eth
mseth/eth
peth/eth
Another pool potentially affected is arbitrum’s tricrypto. Auditors and Vyper devs could not find a profitable exploit, but please exit that one
As the hack came to light, the development team decided to pull some funds out of the pools and protocol for safekeeping, which led to a massive decline in the TVL on the protocol.
According to the Decentralized Finance (DeFi) analysis site, DeFiLlama, Curve Finance lost more than $1.6 billion from the TVL, which included the funds that were pulled out for safety as well the money stolen by the hackers. Consequently, the TVL on Curve fell from $3.7 billion to $2.1 billion at the time of writing.
Curve Finance TVL
As the TVL declined, panic ensued, and investors began to sell their assets to prevent losses on their end. Thus a massive sell-off began, which caused the CRV price to crash by 25%. The Relative Strength Index (RSI) concurred as the indicator fell into the oversold zone within 48 hours for the first time after nearly a month and a half.
CRV/USD 1-day chart
The Curve Finance team did not respond to a request for comment yet; however, per the most recent update from the team, some pools on the protocol remain unsafe even after 48 hours of the initial exploit.
Incentives for WETH+CRV, arbi-USDT+WBTC+WETH votes have been removed from votemarket. Please unvote those pools: first one has been exploited, and second one could be unsafe pic.twitter.com/gkERLnNuUY
— Curve Finance (@CurveFinance) July 31, 2023
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Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
