- crvUSD depegged by 0.35% but has since improved to 0.1%.
- CRV has been unable to reclaim the pre-hack price range.
The recent hacking incident involving Curve Finance had significant repercussions not only on its native token CRV but also on its native stablecoin, crvUSD. Both tokens were affected, and the extent of the damage they suffered raised concerns.
Read Curve Finance’s [CRV] Price Prediction 2023-24
crvUSD getting stable
On 30 July, Curve Finance experienced a security breach, leading to a substantial loss of approximately $70 million. The exploit targeted several stable pools that used Vyper, a programming language, and exploited a vulnerability in certain versions of the Vyper compiler.
This vulnerability prevented the correct implementation of the re-entrancy guard, a mechanism designed to lock a contract and prevent multiple functions from executing simultaneously.
Due to the exploit, both the native token CRV and the stablecoin crvUSD were negatively affected. The value of CRV experienced a decline, and crvUSD also suffered a depegging effect.
However, according to a recent post from Curve, the impact on crvUSD’s peg was relatively minor. The stablecoin only depegged by 0.35%; since then, it has improved to 0.1% as of this writing.
What about crvUSD? How does its price react to shock events, does it depeg?
Events of recent days felt similar to SVB/USDC situation in some sense. However, crvUSD had just a 0.35% dip, and currently 0.1% from the peg pic.twitter.com/HaMfbkiFSR
— Curve Finance (@CurveFinance) August 3, 2023
Volume spikes as Curve fights depegging
Analyzing the stablecoin trend on CoinMarketCap, it became evident that Curve Finance’s stablecoin decline began on 31 July. During the initial stages of the decline, the trading volume showed normal movement, hovering around $30 million.
However, as the Curve stablecoin deviated further from its peg, the trading volume started to spike. On 1 and 2 August, the volume ranged between $40 million and $60 million.
The increased trading volume as the stablecoin moved away from its peg indicated heightened market activity. Some traders chose to sell their holdings as the stablecoin lost its peg, while others took advantage of the slight decline and entered into new positions.
As the stablecoin gradually regained its peg, the trading volume returned to its normal trend, suggesting that market participants reacted to the changing dynamics and volatility of the stablecoin.
Realistic or not, here’s CRV’s marketcap in BTC’s terms
CRV’s struggles continue
As per the daily timeframe chart, Curve Finance has struggled to recover the price range it previously fell from. Despite experiencing an 8% rally on 1 August, it has since resumed its decline. As of this writing, the token was trading at approximately $0.5, with a less than 1% loss.
Moreover, the Relative Strength Index (RSI) on 30 August indicated that Curve was still in a strong bearish trend. This suggested that the selling pressure and negative sentiment surrounding the token remained significant.