According to a new post on January 26, Marc Zeller, lead integration in the decentralized finance (DeFi) credit protocol Aave, stated that the firm bought 2.7 million Curve (CRV) tokens, which will remove “a lot of bad debts” in the next 15 hours twelve transactions. The move follows the Aave Improvement Protocol (AIP) 144 community agreement, which was distributed swap contract that has 2.7 million CRV Units, with a USD Coin (USDC) spending limit of $3,105,000 and a maximum unit value of $1.15 per CRV.
Bad debt in the Aave protocol is the result of a sophisticated exploit that took place on November 23. Avaraham Eisenberg, who previously channeled DeFi Protocol Mango Markets and caused $ 47 million in net damage, took in a series of heavy volume short CRV positions in Aave in an attempt to manage squeeze short and force the developer to buy back the position at up to 100% slippage due to lack of liquidity.
However, it turned out that Aave had more liquidity than anticipated, and Eisenberg reportedly lost $10 million on the trade. However, some slippage occurred as a result of the incident, and Aave was left with a total of 2.656 million CRV in bad debt during the liquidation of Eisenberg’s position.
On the same day, Mango Markets filed a lawsuit against Eisenberg, asking the court to cancel the $47 million reward agreement with the hacker for his role in the exploitation of $117 million on October 12, 2022. The United States Securities and Exchange Commission has Eisenberg stolen $117 million in assets digital. Eisenberg was arrested in Puerto Rico by the Federal Bureau of Investigation on December 27, 2022, on charges of commodity manipulation and commodity fraud.
