What do you think about the collapse of CRV currency? Analysis of the reasons for the collapse of CRV currency

Today I read the readers’ comments and the information on the Internet and found out that the price of CRV coins has plummeted.

The trigger was that the CRV mortgaged by the project founder in many lending applications was liquidated, which triggered a sell-off and caused the price to plummet.

In my impression, this is the second time that the project founder has caused such an incident.

Last time, the founder also mortgaged a large amount of CRV to a lending application to lend stablecoins, which caused a lot of panic---there were estimates at the time that if CRV was liquidated, it would even lead to a large amount of CRV being mortgaged. AAVE was unable to liquidate in time, resulting in AAVE becoming indebted.

Fortunately, at the critical moment, several well-known players privately bought tens or hundreds of millions of CRV tokens in bulk at a price of about US$0.5, avoiding the imminent liquidation.

But this time, CRV was not so lucky.

The most essential problem reflected by these two incidents is that the project founders themselves have no confidence in the tokens of their projects.

How far can such a project go in the future?

I always believe that to see whether a project has long-term development potential, we first need to look at the project team. Using this standard to evaluate Curve's current situation, it is obvious that the project's future development potential is very limited.

A reader in the comment area asked me how I deal with the CRV in my hand now?

After I fully learned about this incident, I sold all the CRV in my hands as soon as possible.

Will the price of CRV go back up in the future?

I think it is still possible, especially when the bull market truly arrives, sector rotation will most likely benefit the DeFi sector, and CRV will also benefit when DeFi generally rises.

But it is difficult to estimate how high CRV can rise.

What’s more important to me is that through these two incidents, I am no longer optimistic about this project. So I will no longer worry about some details (such as how to choose a suitable high point to cash out), but just stay away from this project.

Now looking back at the investment process of CRV, I feel that I have made a mistake before:

The last time the founder almost triggered liquidation because he mortgaged CRV, it was already stated that the founder of the project existed Problem, and there were many rumors on the Internet at that time that the founder was extravagant. These signs are enough to indicate that there is a problem with the project founder.

At that time, I should have sold all CRV without hesitation.

The reason why I still had reservations at that time was mainly because this project played an extraordinary role in the entire DeFi ecosystem and was the cornerstone of the ecosystem.

But now I think about it, I still need to go back to the project itself and measure the project itself according to the standards for evaluating the project, so as to decide how to proceed.

A reader in the comment area asked whether CRV’s current price is more attractive and is it worth buying?

There is a prerequisite for me to judge whether a project is worth buying: that is, at least if I am optimistic about the project at the moment, I will then check whether its price is cheap enough. If I don't like a project, I won't buy it no matter how cheap it is.

A reader left a message asking that he has a very heavy position on CRV. What should he do now?

I remember that when the price of Matic or Magic was very low, some readers asked similar questions.

I replied at the time: For any currency other than Bitcoin and Ethereum, it is not recommended to hold heavy positions, and positions must be controlled very strictly to prevent accidents and risks.

So what should we do with users who have already placed heavy positions?

If it were me, my approach would be very straightforward, I would just cut off my arm and clear out projects that I was not optimistic about without hesitation.

However, I estimate that many readers will hesitate and be unable to make the move when using this method. If you are really hesitant, then I suggest changing half of the position into Bitcoin or Ethereum.

For our old readers, they have been reading our articles for a while and have experienced many incidents and accidents. I hope that in these experiences, everyone will understand one truth more and more:

Accidents and risks are difficult for us to predict and estimate, but we can completely prevent and control risks.

The events I have written about in many articles and the operations mentioned in many sharings are all operations to prevent and control risks.

For example, regarding this incident, the best way to prevent it is the old saying I have said many times: control positions to prevent risks.

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