On Nov. 23, one day after Mango Markets exploiter Avraham Eisenberg attempted to use a series of sophisticated short sales to exploit decentralized finance protocol Aave, project contributors have put forth a series of proposals to deal with the aftermath. As told by protocol engineering developer Llama and financial modeling platform Gauntlet both of whom are deployed on Aave:
“Over this past week, the user 0x57e04786e231af3343562c062e0d058f25dace9e [wallet associated with Eisenberg] opened a short position on CRV [Curve] using USDC as collateral. At its peak, the user was shorting ~92M units of CRV (roughly $60M USD at today’s prices). The attempt to short CRV on Aave has been unsuccessful, and the user lost ~$10M USD from the liquidations.”
Llama wrote that the user had been liquidated but at the cost of $1.6 million in bad debt, likely due to slippage. “This excess debt is isolated only to the CRV market,” the firm wrote.