Abracadabra Demands 200% Interest on Curve Founder’s Loan
One platform is advocating an aggressive measure, boosting interest rates on that loan exponentially to effectively liquidate the position, as decentralised finance (DeFi) protocols scurry to defend themselves from the risks posed by a big loan made against crv (CRV) tokens.
Today, Abracadabra Finance launched a proposal that would impose exorbitant interest rates on two distinct pools of what it refers to as “cauldrons” made up of Michael Egarov, the creator of Curve Finance, crv.
By withdrawing $18 million from Abracadabra at the current rate of 18%, Egarov has done so. However, Wednesday’s policy aims to double this, thus squeezing him out. With this strategy, Abracadabra hopes to limit its overall crv exposure to tokens valued only $5 million.
The interest rate hike is a gradual 200% increase, starting at 200% and decreasing as the loan is paid back through automatic selling of crv tokens. Developers expect repayment in six months, with proceeds going to the Abracabadra treasury.
(With inputs from Shikha Singh)
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