DeFi may not have always been morally bankrupt, but its egalitarian and democratic aims were likely always doomed, danielgkuhn writes. Opinion for The Node newsletter
had put downward pressure on those loans, and had CRV dropped below a certain price it would have triggered the programmatic sell off of Egorov’s loan collateral. That would have likely kicked off a vicious cycle where the CRV price would continue to drop, forcing other loans into liquidation, which would cause CRV to drop even lower.
Other people were pushing for platform founders like Aave CEO Stani Kulechov to intervene in the markets – not by disabling the protocol necessarily, but possibly tapping into an Aave insurance fund or using a Safety Module that can be flipped on in extreme situations .This wouldn’t have been the first time a DeFi giant like Egorov would have been bailed out or the first time bad judgment caught up with someone in crypto.
But given how close DeFi came to death, it’s worth asking hard questions. Why exactly was Egorov allowed to amass nearly half the total CRV supply – a situation that is on the surface entirely antithetical to the supposed egalitarian aims of DeFi?
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