Target On Aave This Time
The most buzzing news in the crypto space today was the comeback of Avi Eisenberg. Last month, he attacked the Solana-based Mango Markets, totaling a huge sum of $116 million in his pocket.
But the “highly profitable trader” with his high spirit took the target of a much bigger project this time. It was none other than the crypto lending firm Aave of $3.64 billion.
Similar as in the case of Mango attack, Avi Eisenberg simply just used the range of the project code. He did nothing which can be counted as the backdoors, tax loopholes or any fraud.
However this time, he was unsuccessful in his goal, presenting another fascinating story for the crypto snoops. Let’s know what really happened in the recent one.
Mango markets is a Solana-based platform used for the spot margin and trading perpetual futures on a Solana blockchain. Mango market is regulated by Mango DAO. It took the Mango market treasury down to a negative of -$116.7 million.
USDT, SOL, BTC, MSOL, and USDC, throwing all of them out of the Mango’s liquidity. Mango markets has presented hackers a chance to collect a bug bounty as a replacement to the stolen funds.
Story’s Snapshot
In a period of over ten days, Avi Eisenberg accumulated a loan on Aave of 92 million in Curve regulated token (CRV) in exchange of $50 million worth of USDC as collateral. Then, all those CRV tokens were sent to the centralized crypto exchange OKEx in huge packs of quantities. Then he repeated the cycle of swapping new USDC tokens with CRV tokens again and again.
His goal was certainly to build a huge short position in the CRV token. It can be because of two reasons-
- Avi Eisenberg was willing to liquidate the massive CRV loan of founder Michael Egorov. According to the sources, Egorov has over $48 million of loan on Aave and this move could bring the CRV price to decline as a result of which the loan amount price will get liquidated.
- Also, Avi Eisenberg might be examining the boundaries of Aave. With such a huge difference caused by Short selling, the Aave might have been in bad debt of $16 million in case it fully got liquidated.
Firstmost solution to tackle problems like such can be Safety Module (SM), which is “the primary mechanism for securing the Aave Protocol is the incentivization of AAVE holders to lock tokens into a Smart Contract-based component.”
Another proposal which can be used is using funds from Gauntlet, a DeFi-focussed risk management provider.
Source: https://www.thecoinrepublic.com/2022/11/27/mango-market-hackers-goes-off-target-but-still-frightens-aave-this-time/