Crypto research firm Delphi Digital raised concerns about the potential for a DeFi implosion triggered by the $100 million debt of Curve Finance (CRYPTO: CRV) founder, Michael Egorov.

In a series of tweets, the research firm stated that Egorov has a massive loan backed by approximately 427.5 million CRV tokens, which is about 47% of the entire circulating supply of CRV.

With CRV's value declining by 10% in the past 24 hours, the stability of Curve Finance is under threat, it added.

It further stated that on the Aave (CRYPTO: AAVE) platform, Egorov has a loan of 63.2 million USDT, backed by 305 million CRV.

If the CRV/USDT price falls by approximately 33%, his position could be eligible for liquidation.

Egorov is also paying an annual percentage yield (APY) of around 4% for this loan.

Egorov has another debt on the Frax Finance platform, where he has supplied 59 million CRV against a debt of 15.8 million FRAX.

Despite this being a smaller position than his Aave loan, it poses a larger risk due to Fraxlend's Time-Weighted Variable Interest Rate.

At 100% utilization, the interest rate doubles every 12 hours.

The current interest rate is 81.2% and could increase to nearly 10,000% APY after three and a half days.

Egorov has attempted to lower his debt and the utilization rate twice, repaying a total of 4 million FRAX over the past 24 hours.

However, the market's utilization rate remains at 100% as users quickly remove liquidity as soon as he repays.

Delphi Digital has warned that these large positions at risk pose serious concerns to the CRV price considering the low amount of liquidity that exists.

There is approximately $10 million worth of CRV liquidity on-chain and a -2% depth of $370,000 on Binance (CRYPTO: BNB). These position sizes that are at risk of liquidation are in the eight-figure range.

Thus, the CRV price could potentially tank to extreme lows, causing knock-on effects over a large part of the DeFi ecosystem.

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In response to the situation, Egorov has deployed a new Curve pool and gauge: a 2 pool consisting of crvUSD & Fraxlend's CRV/FRAX LP token, seeded with 100k of CRV rewards.

This is an attempt to incentivize liquidity towards the lending market in order to lower utilization rates and decrease the risk of his debt spiraling out of control.

Four hours after launch, this pool attracted $2 million in liquidity and decreased the utilization rate to 89%.

Egorov seems to have raised more than $15 million in stablecoins through CRV OTC sales.

The arrangement is a handshake agreement for a three to six-month lockup on the tokens, which can also be sold at $0.80 if the price rises that high.

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