Millions of Tethers (USDT) were sold at popular Curve pools this morning.
USDT balances in Curve protocol's stablecoin swap pool 3 pools consisting of USDT, USD Coin (USDC) and DAI jumped over 72% earlier this morning and USDT lost its peg to $1.
Tether CTO Paolo Arduino stated that this was due to the negative sentiment in the crypto market, while the Curve founder took precautions against a possible liquidation risk.
According to The Block, a wallet affiliated with Michael Egorov, the founder of Curve Finance, returned 1.35 million USDT to Aave, reducing its on-chain debt.
Curve founder Egorov has a loan of 62 million USDT backed by 288.7 million Curve DAO (CRV) worth 167 million dalar.
It was stated that since the loan size is too large, the liquidity pools will be insufficient in a possible liquidation and the founder of Curve paid his loan due to the decrease in the CRV with the expectations that the CRV may decrease further.
In addition, DeFi risk management firm Gauntlet has offered the Aave community a freeze of all CRV tokens in response to potential liquidation.
Making a statement on this subject, Curve founder made a statement about the Aave loan:
"It's better to be a little more careful with the position at Aave. It's better for me to be paid even if the CRV offer is rejected."
*Not investment advice.