Aave purchases 2.7M CRV to clear bad debt following failed Eisenberg attack
According to a new post on Jan. 26, Marc Zeller, integrations lead at decentralized finance (DeFi) lending protocol Aave, stated that the firm purchased 2.7 million Curve (CRV) tokens, which would clear “excessive remaining bad debt” within the next 15 hours over a dozen transactions.
The move follows the community approval of Aave Improvement Protocol (AIP) 144, which deployeda swap contract that acquires 2.7 million units of CRV, with a USD Coin (USDC) spend limit of $3,105,000 and a maximum unit value of $1.15 per CRV.The bad debt on the Aave protocol resulted from a sophisticated exploit that took place on Nov.
23. Avaraham Eisenberg, who previously drained DeFi protocol Mango Markets and caused $47 million in net damages, took on a series of heavy volume short CRV positions on Aave in an attempt to orchestrate a short squeeze and force developers to buyback his positions at upward of 100% slippage due to lack of liquidity.However, it turned out Aave had much more liquidity than anticipated, and Eisenberg reportedly lost $10 million on the trade.
Nevertheless, some slippage occurred as a result of the incident, and Aave was left with a total of 2.656 million CRV in bad debt while liquidating Eisenberg’s positions.
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