How to view the plunge of CRV

Author: Daoshuo Blockchain

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

The trigger was that the CRV pledged by the project founder in many lending applications was liquidated, which triggered a sell-off and caused a sharp drop in prices.

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

The last time, the founder also pledged a large amount of CRV to the lending application to borrow stablecoins, which caused a lot of panic---At that time, it was estimated that if CRV was liquidated, it would even cause AAVE, which had pledged a large amount of CRV, to be liquidated in time, resulting in AAVE debt.

Fortunately, at the critical moment, several well-known players privately bought tens of millions 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 events is that the project founders themselves have no confidence in the tokens of their own projects.

How far can such a project go in the future?

I always think that to see whether a project has long-term development potential, we must first 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 message area asked me how I deal with my CRV now?

After I fully understood 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 possible, especially when the bull market really arrives, the sector rotation will most likely benefit the DeFi sector, and CRV will also benefit when DeFi rises generally.

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

What is more important to me is that after these two events, I am no longer optimistic about this project. So I will no longer be entangled in some details (such as how to choose the right high point to cash out), but will directly stay away from this project.

Looking back on the investment process of CRV now, I think I made a mistake before:

The last time the founder almost triggered the liquidation action because of mortgaging CRV, it already showed that the founder of the project had problems, and there were many rumors on the Internet at that time that the founder was extravagant. These signs are enough to show that there are problems with the founder of the project.

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

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

But now I think we should go back to the project itself and measure the project itself according to the standards for evaluating projects, so as to decide how to proceed.

In the message area, a reader asked if CRV is worth buying because its current price is attractive?

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

A reader left a message asking what to do now that he has a heavy position in CRV?

I remember that when the prices of Matic or Magic were very low, some readers also asked similar questions.

I replied at that time: It is not recommended to have a heavy position in any currency other than Bitcoin and Ethereum. The position must be strictly controlled in order to prevent accidents and risks.

So what should be done with users who have already held a heavy position?

If it were me, the handling method would be very straightforward, and I would directly cut off my arm and clear the position without hesitation for the project I don’t think highly of.

However, I estimate that many readers will hesitate and hesitate when they actually operate this method. If you are really hesitant, then I suggest that you change half of the position to Bitcoin or Ethereum.

For our old readers, you have been reading our articles for a while, and you have experienced many events and accidents. I hope that through these experiences, everyone should 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 about preventing and controlling risks.

For example, for this incident, the best way to prevent it is the old saying I have said many times:

Control positions to prevent risks.