Effects of Curve’s hack echo as CRV volume craters

Posted: September 13, 2023

• CRV’s daily trading volume fell by 98% since July’s reentrancy hack.
• Liquidity on the protocol’s stETH-ETH pool has experienced a decline as well.

The trading volume of Curve Finance [CRV] across centralized and decentralized exchanges (DEXes) has fallen to a new low, crypto research firm Kaiko noted in a new post on X (formerly Twitter).

📈#CRV volume has fallen from a recent daily high of $300mn to just $7mn on September 7, nearly all of which took place on centralized exchanges. pic.twitter.com/ZIcMpwcZ9O

— Kaiko (@KaikoData) September 12, 2023

Data tracked by the on-chain data provider revealed that CRV’s trading volume began to plummet following the protocol’s reentrancy hack on 30 July.

CRV’s trading volume rallied to a daily high of $300 million on that day due to increased token sell-offs, as many feared a severe decline in the alt’s value. 

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By 7 September, the asset’s daily trading volume was less than $10 million, having declined by 98%. The steady fall in trading volume has resulted in a significant drop in CRV’s value since the beginning of August.

Exchanging hands at $0.39 at press time, its price has decreased by 45% since the exploit.

Source: CoinMarketCap

Demand for CRV has cratered

An on-chain assessment of the daily demand for CRV since the hack revealed that the count of new addresses created to trade the alt daily has fallen to its lowest in three months. As of 12 September, only 27 new CRV addresses were created.

Moreover, the number of active addresses involved in CRV trades daily since the exploit has also plummeted. According to data from Santiment, there was a 72% drop.

Source: Santiment

Curve’s problems go beyond just its native token

Apart from the steady decline in the token’s curve, increased liquidity exit from Curve Finance has led to a fall in the DEX’s total value locked (TVL).

Previously ranked as the third-largest decentralized finance (DeFi) protocol in terms of TVL, the exploit has pushed Curve Finance to the sixth position, data from DefiLlama showed.

Its TVL was $2.46 billion at press time, registering a 35% drop since 30 July. In the last month, this has decreased by 12%.

Further, one of Curve’s largest liquidity pools, stETH-ETH, experienced a reduction in daily trading volume and TVL over the past few weeks. Dune Analytics further indicated that between 30 July and 31 August, trading volume on the pool fell by 94%.

Read Curve’s [CRV] Price Prediction 2023-24

For context, on the day of the hack, the trading volume on Curve’s stETH-ETH liquidity pool totaled $81 million. On 31 August, this was less than $10 million. 

As liquidity providers scampered to remove funds from the pool after the exploit, its TVL dwindled. By 31 August, it had fallen by 20%. 

Source: Dune Analytics