Thread by @insurenimble

Details on the attempted Aave exploit. Credit to
@Dentweb3 for the recap.

Read more here: decrypt.co/115390/mango-m…

#defi #hack #mango #aave

"Mango Market hacker tried to exploit Aave.

Aave only lost $1.6 million.

But the hacker lost $10 million of his own money.

"Avi Eisenberg, the guy who made $100 million from Mango Market was after Aave recently.

And things didn't turn out quite as he expected.

Avi isn't exactly a hacker who breaks in steals stuff and then gets out.

"He exploits system security by putting extreme stress on the system.

In Aave's case, he took out a loan of 92 million $CRV tokens (aave's gov token) at around a total value of $39 million against 50 million $USDC in collateral.

"So Avi put $50 million of his own money in the mix.

Then he sent large chunks of the $CRV token to Okex, a crypto exchange.

Then he swapped some of those $CRV for $USDC to take out more $CRV.

"So he basically leveraged the shit out of Aave tokens effectively creating a massive short position.

The apparent target was to liquidate a $48 million loan of Aave co-founder Michael Egorov.

If $CRV price went below $0.29, he would have been margin called and liquidated.

"Thankfully, Egorov solidified his position with a major chunk of additional collateral.

As a result, Avi got sort of short-squizzed and lost around $10M of his own money.

However, Aave also lost around $1.6 million in bad debt, but it could have been worse.

"Aave is a platform that continuously impresses me.

They pioneered DeFi when nobody understood it, and they're still running with a solid business model after 2 crypto winters and loads of scams.

What an inspiration for new platforms!"