First Mover Asia: BTC, ETH Stable While COMP and AAVE in the Red

Good morning. Here’s what’s happening:

Prices: Traders are taking aim at lending protocols following the attack on Curve

Insights: Curve Finance chaos following its hack over the weekend has put a $168 million lending position held by founder Michael Egorov at greater risk of liquidation. PLUS: The litecoin Foundation and Ballet tease a collectible card sale.

Prices

CoinDesk Market Index (CMI) 1,229 −8.3 ▼ 0.7% Bitcoin (BTC) $29,273 −195.9 ▼ 0.7% Ethereum (ETH) $1,861 −14.6 ▼ 0.8% S&P 500 4,588.96 +6.7 ▲ 0.1% Gold $2,001 +41.0 ▲ 2.1% Nikkei 225 33,172.22 +413.0 ▲ 1.3% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)CoinDesk Market Index (CMI) 1,229 −8.3 ▼ 0.7% Bitcoin (BTC) $29,273 −195.9 ▼ 0.7% Ethereum (ETH) $1,861 −14.6 ▼ 0.8% S&P 500 4,588.96 +6.7 ▲ 0.1% Gold $2,001 +41.0 ▲ 2.1% Nikkei 225 33,172.22 +413.0 ▲ 1.3% BTC/ETH prices per CoinDesk Indices, as of 7 a.m. ET (11 a.m. UTC)

Bitcoin, Ether Stable, CRV Slumps as Market Braces for Monster Liquidation

As Asia begins its business day, crypto majors like bitcoin and ether are stable, but it's a sea of red elsewhere.

Bitcoin is down 0.16% to $29,236, and ether is changing hands at $1,857, down 0.27%.

eToro US Investment Analyst Callie Cox blames seasonality as a reason why the crypto majors aren’t moving.

“The seasonal patterns we see show that bitcoin prices have been a little bit weaker in August and September,” Cox said on CoinDesk TV's "First Mover" program. “People are going off to the beach; they're not looking at their portfolios or trading their portfolios.”

But elsewhere in the market, chaos is looming.

CRV, the token attached to Curve Finance’s DAO, which recently suffered an exploit via a bug in the programming language used in its tech stack, is down 10.3% to 56 cents.

Part of the reason why the market is reacting in such a way is because of a lending position held by founder Michael Egorov on lending protocol Aave.

Egorov currently has a $168 million lending position on Aave secured by CRV, which is drifting toward liquidation. Should this be liquidated, the rapid price declines would cause a cascading series of liquidations, and the liquidated assets would flood the market.

As such, lending protocol tokens like AAVE, Compound’s COMP, Maple Finance’s MPL, and Maker’s MKR are leading the market declines. AAVE is down 8%, while COMP has declined 8.8%, MPL is down 3.2%, and MKR 2%.

Biggest Gainers

Asset Ticker Returns DACS Sector Gala GALA +12.8% Entertainment XRP XRP +7.5% Currency Terra LUNA +4.2% Smart Contract Platform

Biggest Losers

Asset Ticker Returns DACS Sector Stellar XLM −19.0% Smart Contract Platform Dogecoin DOGE −13.4% Currency Chainlink LINK −10.4% Computing

Insights

Curve Chaos Continues

Chaos at Curve Finance has put a $168 million lending position held by founder Michael Egorov at greater risk of liquidation, an event that – if it happens – could have giant implications across decentralized finance (DeFi). Egorov has $168 million of CRV – Curve’s native token – securing loans from multiple DeFi protocols, data on blockchain analytics site DeBank shows. That equals almost 34% of the token’s total market capitalization. Following an exploit over the weekend at Curve, CRV’s price has sunk more than 20%, putting Egorov closer to levels where he’d get liquidated.

Litecoin, Ballet's Silver Cards

Litecoin is sometimes referred to as the “digital silver” to bitcoin’s reputation as “digital gold.” That reference appears to be the basis for a new crypto promotion by Litecoin creator Charlie Lee and his brother Bobby Lee, aiming to capitalize on a sudden surge in interest in the project, thanks to a quadrennial event in the blockchain’s lifecycle known as a “halving,” happening this week. Bobby Lee is CEO and co-founder of Ballet, a manufacturer of special cards used for “cold storage” or holding crypto offline. And he’s teamed up with his younger brother Charlie Lee, executive director of the Litecoin Foundation, to commemorate the blockchain’s third halving by creating 500 collectible cards made of 99.9% pure silver. The cards themselves – the silver alone – could carry a value of roughly $40 a card, but they would also be loaded with 6.25 LTC, or $581 worth. They are expected to be sold for about $1,000, which means the premium would roughly represent intangible value to buyers. All proceeds from the sale will be donated to the Litecoin Foundation to further the blockchain’s adoption and development, according to Charlie Lee.

Important events.

MicroStrategy Q2 Earnings

8:30 a.m. HKT/SGT(12:30 p.m. UTC): Jibun Bank Manufacturing PMI (July)

9:45 a.m. HKT/SGT(1:45 a.m. UTC): Caixin Manufacturing PMI (July)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Curve Finance Drained of $50M in Latest DeFi Exploit; Bitcoin Flirts With $29.5K

More than $100 million worth of crypto could be at risk due to a bug impacting Curve, a stablecoin exchange at the center of Ethereum’s DeFi ecosystem. Ava Labs president John Wu weighed in on what this means for the state of the crypto industry, along with his thoughts on asset tokenization. eToro US investment analyst Callie Cox shared her outlook on bitcoin ahead of the July jobs report. And, DappRadar's Pedro Herrera discussed the future of decentralized social dapps.

Headlines

IRS: Crypto Staking Rewards Taxable Once Investor Gets Hands on Tokens: The latest tax guidance from the Internal Revenue Service outlines how and when staking rewards are taxed.

Coinbase’s New Base Blockchain Gobbled Up $68M in Ether, and It’s Not Even Officially Live Yet: Meme coin BALD’s 4,000,000% surge seemed to spark the huge inflows to the nascent crypto bridge.

After the Curve Attack: What's Next for DeFi?: The $70 million weekend exploit of major platforms, including Curve, come at a time when developers are discussing changes to the prevailing AMM liquidity model.