Trading Volumes for Curve’s CRV Token Drop 97% Following July Hack
Trading volumes for CRV, the governance token of Curve, a decentralized exchange (DEX) for stablecoins, have plummeted by 97% since a hack in late July 2023. According to data from Kaiko, CRV’s trading volume on centralized exchanges, particularly on Binance, where the token is actively traded, has fallen from nearly $300 million in late July to just $7 million as of September 12. This significant decrease in trading activity suggests a decline in interest in the token and cautiousness among investors.
CRV is available for trading on multiple centralized and decentralized exchanges, including Binance, Uniswap, and Curve. However, Binance, being one of the most popular and liquid crypto exchanges, accounted for the majority of CRV trading. Currently, Binance holds about 20% of CRV trading, followed by Bitbox with a dominance of approximately 7%.
The drop in trading volume for CRV is indicative of the declining interest in the digital asset and the cautiousness of investors in the crypto market. When trading volume decreases, liquidity for the asset is affected as traders and investors opt for stability and refuge. Some may adopt a wait-and-see approach to evaluate how the token will respond to changing market conditions.
According to data from DeFiLlama, Curve’s total value locked (TVL) currently stands at around $2.17 billion, a decrease from $3.25 billion before the hack in July. The decline in TVL and trading volumes aligns with the overall slump in the decentralized finance (DeFi) scene.
The hack in July resulted in Curve losing over $50 million worth of assets. Although the majority of the funds have been recovered, the incident raised concerns about the overall security of the protocol.
The hack was executed by exploiting various Curve stablecoin pools using older versions of Vyper, a programming language utilized for creating smart contracts on the Ethereum network. The automated nature of Curve’s pools allowed hackers to drain multiple pools through a re-entrancy attack.
As a result of the hack, the price of CRV dropped sharply from around $0.74 to $0.48 on July 30. Since then, it has continued to decline and currently sits at $0.40, a new low for 2023.
During this period, Curve’s CEO Michael Egorov had to sell his CRV holdings, which he had used as collateral for loans on Aave and Frax Finance, over-the-counter (OTC) to entities and individuals such as Justin Sun, as prices started to fall. Egorov’s decision highlights the impact of the hack on his personal finances and the need for immediate action to mitigate potential losses.
It will be crucial for Curve to address the security concerns and regain the confidence of traders and investors in order to reverse the decline in trading volumes and restore the token’s value.
Sources:
– Kaiko: https://www.newsbtc.com/news/defi/curve-exchange-trading-volumes-plunge-97-in-2-months/(https://twitter.com/KaikoData/status/1701619173674172773)
– DeFiLlama: https://www.newsbtc.com/news/defi/curve-exchange-trading-volumes-plunge-97-in-2-months/(https://defillama.com/protocol/curve-finance)
– Chart source: TradingView
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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