- Curve Finance was the victim of a recent exploit and the malicious entity deposited 400 ETH and withdrew millions.
- CRV is trying to recover, but demand for whales remains low.
The past few days have been quite a rollercoaster for Curve Finance and its native token CRV. The network recently experienced an exploit that sent ripples of FUD through the enter Curve Finance ecosystem.
Is your wallet green? Then view the CRV Profit Calculator
Kaiko Data analyst Riyad Carey laid out the chain of events leading up to CRV’s recent crash. The network’s CRV-ETH pool reportedly experienced an exploit. The malicious actors behind the exploit reportedly deposited 400 ETH and somehow managed to withdraw tokens worth millions of dollars.
1/ There have been many threads about this already $CRV/Curve/Aave/Fraxlend so I’ll try to gather all the information and add some graphs I’ve made, regarding:
off chain bids
OI and volume weighted funding rate
Outflow of the L&B protocol
and moreLet’s get into it pic.twitter.com/0EokBZwtyw
— Riyad Carey (@riyad_carey) August 3, 2023
The exploit took place on July 30. This was around the same time CRV’s price began a steep sell-off. According to the analysis, Curve’s limited liquidity contributed to the price drop.
For perspective, the token crashed by a whopping 33% between July 30 and August 1. This was due to CRV holders being counterfeited to sell their tokens. The network’s low liquidity didn’t help either.
CRV goes into recovery mode after the exploit
Some saw the sharp price drop as an opportunity to buy CRV at a discount. As such, the token bounced off an impressive bounce back. This was supported by a wave of open interest, as noted in the analysis.
CRV changed hands for $0.62 at press time, representing a 24% recovery from its lowest price in the past seven days.
Source: TradingView
A closer look at the CRV price chart revealed that the crash sent the price into oversold territory. This may have further supported accumulation at reduced prices. CRV’s Money Flow Index (MFI) also confirmed that there had been a buying frenzy over the past two days.
The whole situation has certainly made a statement regarding Curve Finance’s activity. For example, the network’s on-chain volume was relatively docile for most of July. The transaction volume metric recorded its highest level of activity in late June, around the same time as the exploit.
Source: Sentiment
Curve Finance also recorded the highest address activity between July 31 and August 1. However, the biggest concern for the Curve Finance community was how the event affected investor confidence.
Read Curves [CRV] price forecast 2023-24
There is no doubt that the traders were surprised by the situation. While we have seen some accumulation at reduced prices so far, it is worth noting that there was a significant outflow of whales that has yet to be recovered. The supply of top addresses has fallen sharply since the end of July.
Source: Sentiment
Consequently, CRV’s average coin age also took a plunge in recent days, indicating a loss of confidence among long-term hodlers.
But will there be more recovery? Well, that remains in the realm of speculation, but it’s going to get harder without whale support.