• The CRV token has rallied 7% on Friday after a hacker began returning funds to Alchemix that were stolen from Curve Finance and other DeFi protocols.
• The hack has caused an erosion of investor confidence in the DeFi protocol, resulting in total value locked (TVL) dropping from $3.7 billion to $2.7 billion.
• Curve Finance has issued a 6th of August deadline for the hacker to return funds in exchange for a 10% cut, or else they will be pursued with the full force of the law.
CRV Price Rally
The native token of the Curve Finance decentralized exchange (DEX) and governance token of the Curve DAO (decentralized autonomous organization), CRV, rallied 7% on Friday to $0.61 after a hacker who stole millions in funds began returning them. Over $50 million was drained from Curve Finance, Metronome and Alchemix on Sunday and currently $8.9 million has been returned to Alchemix, as per Etherscan data. Funds have yet to be transferred back to Curve Finance but this move is spurring hopes that it will soon occur.
Erosion of Investor Confidence
The exploit used by the hacker in Vyper programming language revealed DeFi investor funds not to be as secure as they once thought which has caused investors to yank their crypto capital from the protocol resulting in total value locked (TVL) decreasing from $3.7 billion prior to the hack down to $2.7 billion according to DeFi Llama figures. This erosion of investor confidence could hamper future TVL growth which could be a major headwind for CRV’s value going forward.
Deadline Issued by Curve Finance
Curve Finance issued a 6th August deadline for the hacker with an offer that if they return all stolen funds then no criminal action will be taken against them but they must pay 10% cut instead, otherwise legal action will be taken against them with full force of law if this deadline is missed by them.
Outlook Remains Murky
The positive news about some money being returned does ease up short-term risk but long-term outlook remains murky as loss of trust among investors can lead to decreased demand for CRV tokens over time making it difficult for its price recovery even more despite refunding all stolen money back into system by hackers before time runs out on 6th August deadline set by Curve finance itself otherwise legal action will start against them with full force and there is no telling what kind of effect that would have on price movement going forward..
Conclusion
It remains unclear whether returning stolen funds can solve the major problem being faced by Curve Finance due to lack of trust amongst investors resulting from recent hacking incident leading towards decreased demand for its native token CRV over time making its price recovery even more difficult despite return of all stolen money back into system before time runs out on 6th August deadline set by curve finance itself or else consequences would start being faced with full force having no telling what kind of effect that would have on its price movement going forward..