Curve founder pitches market-based fix for $700K bad debt in contrast to Aave bailout
Michael Egorov proposed a market-based solution using tokenized claims to resolve $700,000 in bad debt on the LlamaLend platform.Summary
Curve founder Michael Egorov has proposed an alternative to traditional bailouts for addressing approximately $700,000 in bad debt on the LlamaLend platform following the October 10 market crash. Rather than seeking a collective rescue, Egorov suggests packaging distressed lender positions into a tokenized vault. This approach creates a secondary market where trapped lenders can sell their claims at a discount to investors, who effectively gain an option-like bet on the recovery of the CRV token. By utilizing Curve's Stableswap design, the proposal aims to provide liquidity and a market-driven valuation for the affected assets, potentially serving as a repeatable model for other DeFi protocols facing similar solvency issues.
(Source：CoinDesk)