Nov 23, 2022 Frank Stewskid

A failed attempt at manipulating CRV price on Aave leaves the exploiter with around $8 million loss

After successfully exploiting Mango Markets for $114 million through market manipulation, notorious crypto trader – Avraham Eisenberg tried to do the same to Aave but failed, losing about 17 million CRV tokens in the process. According to various blockchain researchers, the trader had started building up a short position on CRV on November 14, by borrowing CRV on Aave in an attempt to affect the CRV token price negatively and profit from the short position.

Weeks ago Avraham Eisenberg had shared his plan to manipulate Aave, through a loophole in its lending policies, however, neither Aave nor Gauntlet – a financial platform employed by Aave to prevent such exploits, reacted. 

This led to the trader trying his tactic himself yesterday and failing dramatically in the process. Although CRV’s price did decline initially, changing from $0.53 to $0.41, after that it recovered and even went above its previous level, reaching $0.71 and is currently sitting at $0.62 – a 45.1% change in the last 24 hours, according to various data sources. Following the unsuccessful attempt at manipulating the CRV price, Gauntlet shared a statement on Twitter voicing the failed scheme and announcing plans to mitigate such risk in the future, through a governance proposal changing the parameters on Aave v2 ETH.

Even though it seems the trader was unsuccess in profiting by the token losing its value, the initial drop in its price, as well as the later major spike in it, might have been profitable to the exploiter as they opened liquidation possibilities on Aave. Furthermore, due to the change in the digital asset’s price, Eisenberg or other Aave users were able to borrow more funds against their collateral, which seems to have happened as Gauntlet confirmed Aave is currently sitting on a 1.6$ million bad loan position in a response to a now-deleted Tweet, affirming it would be covering the losses from its insolvency refund program.

 

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