Table of Content
-Aave Clears Bad CRV Token Debt from Exploit Attempt
3. Aave v3 Upgrade
4. Exploiter and Liquidator Profit
Aave Clears Bad CRV Token Debt from Exploit Attempt
Decentralized finance (DeFi) protocol Aave has cleared the bad debt of 2.7 million Curve DAO tokens (CRV) resulting from a botched November trade by Mango Markets exploiter Avi Eisenberg, according to blockchain data on Etherscan. The move came after Aave’s community approved the procurement of the necessary CRV tokens using the ParaSwap decentralized exchange aggregator in a governance vote concluded on Tuesday, ahead of the activation of a major tech upgrade called Aave v3.
In November, Avraham Eisenberg roiled Aave with a trading strategy that involved borrowing tens of millions of CRV tokens from the platform. After a sudden price spike due to a short squeeze, his position got liquidated, leaving Aave with bad debt in CRV that amounted to $1.6 million at the time. Notably, an analysis by DeFi data platform EigenPhi found that the liquidator of the bad debt pocketed some $1 million profit due to recent upswings in crypto markets which helped lead to a 98% gain in CRV since the start of 2021. Avi Eisenberg became famous in crypto circles after draining some $110 million worth of digital assets from Solana-based lending protocol Mango Markets with his “highly profitable trading strategy” and was subsequently charged with commodities fraud and manipulation late December 2020 in Puerto Rico.
Aave v3 Upgrade
The maneuver comes ahead of the activation of Aave’s major tech upgrade called Aave v3 which will bring improved user experience and new features such as staking rewards for AAVE token holders and support for additional assets like NFTs and non-Ethereum chains like Polkadot and Binance Smart Chain (BSC). As part of this upgrade, users will also be able to access new products such as flash loans, interest rates swaps and more efficient liquidity management tools for yield farming strategies on both Ethereum and other blockchains connected through bridges or parachains..
Exploiter And Liquidator Profit
Notably, an analysis by DeFi data platform EigenPhi found that while Avi Eisenberg caused significant losses for Aave during his exploit attempt – estimated at over $100 million – he only profited around $20 million while it was actually another party who pocketed most profits – estimated at over $80 million – as they were able to take advantage of higher prices during liquidation auctions following Ethereum’s recent bull run..