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DeFi Ecosystem Faces Curveball as CRV Exposure Risk Emerges: Finance Redefined

DeFi Ecosystem Faces Curveball as CRV Exposure Risk Emerges: Finance Redefined

Most DeFi tokens traded in the red on weekly charts due to the Curve Finance exploit, which had a domino effect on the DeFi ecosystem. The exploit resulted in a $47 million loss and caused several lending protocols to propose new governance measures to minimize exposure risks. The native stablecoin of the ecosystem, crvUSD, depegged due to market conditions. The exploit also had a negative impact on the price of DeFi tokens, with a majority trading in the red. The exploit was caused by a reentrancy vulnerability in Vyper versions 0.2.15, 0.2.16, and 0.3.0. The CRV price was saved from collapsing by the centralized exchange price feed, preventing it from reaching zero. The founder of Curve Finance, Michael Egorov, has taken out loans backed by 47% of the circulating supply of CRV, which has raised concerns about a potential dump. The native stablecoin, crvUSD, briefly depegged but regained its peg to the USD. Overall, the DeFi market saw a bearish decline, with most tokens trading in the red and the total value locked into DeFi protocols remaining below $50 billion.

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