Mango Market hacker loses millions in failed Aave scheme

A notorious cryptocurrency trader, who gloated last month about making off with over $100 million in a controversial price gouging maneuverappears to have lost millions in a similar exploitation attempt that failed early Tuesday morning.

Avraham Eisenberg, the merchant behind October Mango Market Trickrecently borrowed 40 million Curve Tokens (CRV) from decentralized lending platform Aave, according to string data. The drastic move is part of an apparent plan to sell the tokens, plummet the value of CRV as a result, and wipe out millions in short positions on the token, leaving Aave saddled with a huge amount of bad debt.

However, the ploy was not executed as planned. The CRV price declined early Tuesday morning from $0.53 to $0.41, but then quickly recovered and shot up as high as $0.71. At the time of writing, CRV was up 31% in the last 24 hours to $0.67, according to data from CoinGecko.

Weeks ago, Eisenberg publicly outlined a plan to manipulate a loophole in Aave’s credit policies that would theoretically allow a scheme like the one the trader tried on Tuesday to succeed.

However, in the weeks that followed, neither Aave nor Gauntlet, the financial modeling platform employed by Aave, moved to take precautionary measures to prevent a vulnerability like the one Eisenberg described from occurring.

On Tuesday afternoon, after Eisenberg’s brief strategy failed, Gauntlet issued a statement to clarify that Aave had emerged relatively unscathed from the incident.

“Attempt to squeeze CRV into Aave has been unsuccessful and unprofitable,” Gauntlet tweeted. “Despite this, Aave has built up a much smaller insolvent position.”

That smaller insolvency amounts to $1.6 million in bad debt at the end of Aave, according to blockchain data analyzed by blockanalytics—an amount that could have been much higher had Eisenberg’s feat been successful.

in a response In a since-deleted tweet, Gauntlet announced that it would help cover the loss of $1.6 million as part of its bankruptcy repayment programwhich promises to cover losses suffered by clients like Aave due to failures in Gauntlet’s “risk parameter optimizations”.

Hours after Eisnberg’s CRV maneuver failed, an Aave governance proposal it was drafted to prevent a similar scheme from tampering with other cryptocurrencies on the platform in the future.

Some Aave DAO members reacted negatively to the proposal.

“Better late than never, right?” one member wrote. “Gauntlet should have made this proposal long before Avi pulled the trigger. What were you doing all this time while Avi was bragging about his attempt to financially exploit AAVE?

Last month, when Eisenberg took more than $100 million from Solana-based Mango Markets via Oracle price gouging, the Mango DAO agreed to waive any pursuit of criminal charges against the trader if it returned $67 million of funds seized to help the organization. cover his bad debt.

Eisenberg accepted the deal; the next day he revealed himself as the trader behind the move, calling the event, widely regarded as a hack, a “highly profitable trading strategy.”

He did not immediately respond to a request for comment on the events of Tuesday in decipher.

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