According to Dune Analytics, the total value of assets in the Curve protocol’s ETH/sETH liquidity pool fell from $4.5 billion at the beginning of May to approximately $620 million.

The more than seven-fold drop is mainly due to liquidation of positions in stETH by major crypto investors such as Alameda and Three Arrows Capital, experts told CoinDesk.

Liquid staking service Lido Finance provides users with stETH, which represents locked ETH in the Beacon Chain PoS network.

Against the background of the massive sell-off, the price of tokenized ETH differed from the quotes of the underlying asset. At the time of writing, the discount on stETH has exceeded 6%.

The price is also affected by the instability of the pool: ~111,300 ETH corresponds to ~491,000 stETH.

“I feel bad for retailers because Curve was their only option. “Institutions can still get out of this situation with OTC transactions, albeit at a much larger discount than Curve,” said Vance Spencer, co-founder of Frameworks.

According to Kaiko, the pool accounts for 98.5% of stETH trading volume. In early June, the firm’s experts noticed that the Amber investment platform had withdrawn $160 million in assets, while Alameda Research had sold stETH for $88 million. In May, Three Arrows Capital purchased 400,000 ETH and stETH from the protocol.

“The reason the liquidity providers left was because the deal went bad for them after the stable was lost because ETH was selling too cheap. As the pool became unstable, they didn’t want to fall into the trap of simply holding illiquid STET,” said CTO Bob Baxley, Maverick Protocol market maker.

A major owner of tokenized ETH from Lido is Celsius, the crypto lending platform that is facing financial problems. According to Nansen, the company holds at least 409,000 stETH, which is almost four times more than the Curve pool.

“Celsius cannot sell all of its power on centralized or decentralized exchanges, and as a result, it is likely to resort to or resort to an over-the-counter transaction to maintain its solvency,” Kaiko said.

For retail investors, the only real way out of stETH is The Curve, whose pool is shrinking by 10,000-15,000 ETH per day. If the tempo is maintained, it will discharge in two weeks.

Recall that Lido Finance said that the service was operating as usual, despite the fact that the asset was sold by large owners and the discount in stETH.

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