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Mango Market scalper Avraham Eisenberg’s attempt to replicate his “highly profitable trading strategy” on decentralized finance (DeFi) protocol Aave has failed, resulting in millions in loss. According to on-chain analytics firm Lookonchain, an address linked to Eisenberg, he transferred $40 million (roughly Rs. 325 crores) worth of US dollars (USDC) into Aave to borrow Curve (CRV) for the purpose of shorting. This sent the price of CRV down by almost 26 percent to $0.464 (roughly Rs. 37.34) from $0.625 (roughly Rs. 51.14) during the past week.
However, the move didn’t quite go as planned as the community rallied behind CRV, buying the DeFi token and causing its value to surge 46 percent in the last 24 hours to $0.71 (roughly Rs. 57.63).
The CRV war has been played out # save Yesterday and ended with the defeat of the tallest and shortest.
1.🧵
ponzishorter.eth default CRV $ By borrowing and dumping CRV $;CRV $ Guardians bought CRV $raising the price to $0.72, and liquidating all ponzishorter.eth collateral.
– Lookonchain (lookonchain) November 23, 2022
Blockchain analytics firm Arkham Intelligence tweeted to Eisenberg that he likely might be smitten with people for thinking he was shorting CRV for causing the liquidation of DeFi Network founder Michael Egorov.
According to Arkham Intelligence, Eisenberg’s real target was the AAVE The fragile ring system and its loans can cause the DeFi network to suffer severe bad debts. The blockchain analytics firm added, “To liquidate an Avi position, AAVE liquidators would have no way to buy back all of the CRV it borrowed. On-chain, there is no liquidity to pay back more than 20% of the position. AAVE would have to sell large amounts of tokens from the security unit.” to cover this loss.
in October, Eisenberg explained that Aave’s lending policies could have been manipulated into borrowing heavily, dumping it, and leaving bad debt on Aave.
After the short strategy failed, Aave said the process to wind down its CRV complex was a success and went as planned. But it noted that the position was not fully covered as 2.6 million CRV ($1.6 million or roughly Rs. 13 crore) remained, which was less than 0.1 per cent of the positions in the protocol.
2/6 The large CRV borrowing that has been accumulating over the past week has been liquidated through the protocol filtering process. However, the position was not fully covered and 2.64 million CRV (≈ $1.6 million in current terms) remained. This represents <0.1% of the assumptions on the protocol.
– Aave (AaveAave) November 22, 2022
new Suggestion of judgment It is now on Aave which will prevent further price gouging on the platform.
Meanwhile, the Aave community has indicated that the developers could have done something to prevent this scenario because they had received several warnings about the former possibility.
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