A wallet associated with Michael Egorov, the founder of Curve Finance, has repaid a significant amount of debt by returning 1.35 million USD Tether (USDT) to Aave. This repayment has effectively decreased the outstanding on-chain debt.

In a proactive move to minimize the risk of liquidation, Egorov has taken steps to reduce his debt on the decentralized lending platform, Aave. This decision comes at a time when Curve's CRV token has experienced a significant downturn, with a weekly decline of 24%, and is currently valued at $0.57 according to CoinGecko.

Egorov's borrowed position, supported by 288.7 million Curve DAO (CRV) tokens worth $167 million, currently holds approximately 62 million USDT, resulting in a health factor of 1.55. This value has decreased from yesterday's level of over 1.6.

The magnitude of this position has garnered significant interest within the DeFi community. With over 30% of the entire CRV token supply, it represents a notably large stake. However, given the recent decline in price, concerns have emerged regarding potential substantial selling pressure on CRV tokens and an elevated risk of platform liquidation.

As a proactive measure to mitigate the risk of liquidation, Gauntlet, a DeFi risk management firm, has put forth a proposal to the Aave community suggesting the freezing of all CRV tokens on the version 2 platform. The objective behind this proposal is to minimize the potential accumulation of bad debt resulting from Egorov's loan.

In order to implement the freeze, it would be necessary to migrate Egorov's loan position from Aave's second version to its third version, which is widely regarded as having enhanced capabilities for risk management.