A well-known crypto trader, who boasted last month of earning more than $100 million in a controversial price manipulation ploy, lost millions of dollars on Tuesday (22) in a similar exploitation attempt that backfired.

Avraham Eisenberg, the trader behind the DeFi exchange Mango Markets hack in October, borrowed 40 million curve tokens (CRV) from the decentralized lending platform Aave, according to on-chain data🇧🇷

The drastic action was part of a scheme to sell the tokens, plummet the value of the CRV as a result and get million dollars in sales positions of the token—leaving Aave saddled with a huge amount of bad debt.

However, the tactic did not work as he had hoped. The price of CRV dropped on Tuesday from $0.53 to $0.41 but then quickly recovered to as low as $0.71. As of this writing, the CRV is up 31% in the past 24 hours to $0.67, according to data from CoinGecko.

Weeks ago, Eisenberg publicly outlined a plan to manipulate a loophole in Aave’s lending policies that would theoretically allow the scheme to succeed.

However, in the following weeks, neither Aave nor Gauntlet—the Financial Modeling platform used by Aave—took precautionary measures to prevent an exploit such as the one Eisenberg outlined could occur.

On Tuesday afternoon, after Eisenberg’s sell strategy proved unsuccessful, Gauntlet released a statement to clarify that Aave had emerged from the incident relatively unscathed.

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

That minor insolvency amounts to $1.6 million in defaults for the Aave side, according to blockchain data analyzed by Blockanalitica—an amount that could have been much more if Eisenberg’s attack had been successful.

In a answer for a since-deleted tweet, Gauntlet announced it would help cover the $1.6 million loss as part of its insolvency repayment program, which pledges to cover losses incurred by customers like the ones that happened to Aave due to flaws in the Gauntlet’s “Risk Parameters Optimizations.”

against manipulation

Hours after Eisnberg’s CRV ploy failed, a governance proposal for Aave was drafted in order to prevent a similar scheme from manipulating 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 they doing all this time while Avi was bragging about his attempt to economically exploit AAVE?”

attack against mango

Last month, when Eisenberg secured more than $100 million from Solana-based Mango Markets through a price manipulation by the platform’s oracle, Mango DAO agreed to drop any criminal charges against the trader—if he return $67 million of stolen funds to help the organization cover its default.

Eisenberg agreed to the deal; the next day he performed as the trader behind the stunt, calling the event, widely regarded as a hack, a “highly profitable trading strategy.”

He did not immediately respond to a request for comment on Tuesday’s events. decrypt🇧🇷

*Translated by Gustavo Martins with permission from decrypt🇧🇷

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