The community of Aave recently approved a proposal to pay off a CRV 2.7 million bad debt. The bad debts stemmed from a failed exploit launched by Avraham Eisenberg in 2022.
DeFi lending protocol Aave [AAVE] approved a governance proposal on January 25, which aimed to eliminate excess debt in Ethereum [ETH] CRV reserve of the v2 liquidity pool. The bad debt stemmed from a botched exploit launched by Avraham Eisenberg, the notorious hacker behind the $116 million Mango Markets exploit.
Aave proposal approved by 100% of the community
In November 2022, Avraham Eisenberg orchestrated a plan to exploit Aave’s Ethereum v2 liquidity pool by borrowing millions of Curve Dao [CRV] tokens to force a short squeeze. Through the squeeze, the positions of the platform’s developers.
However, due to a price spike, Avraham’s positions were liquidated. This left him with a loss of $10 million and bad debt of 2.7 million CRV for Aave.
To settle this debt, the integration leader at Aave, Marc Zeller, proposed purchasing the CRV tokens in December 2022. After a positive response from the forum, the proposal went to the voting stage. Notably, 100% of the community voted in favour.
The developers deployed a swap contract to purchase the required CRV. The contract’s budget was capped at $3.1 million, with a cap price of $1.15 per CRV. The contract traded one USDC of his massive holdings of 5.2 million aUSDC into the Ethereum collector contract.
Board proposals inspired by Eisenberg
Interestingly, Avraham Eisenberg’s exploit had inspired another governance proposal. The proposal was made within a day of the attempted exploit last year.
Want to make a proposal on November 23, 2022 parameter changes on Aave V2 ETH has been posted in the board forum. It would essentially dismantle the protocol’s low-liquidity asset pools such as CRV and Decentraland [MANA].
Unsurprisingly, the community also overwhelmingly passed this proposal.
This post Aaf [AAVE] approves proposal to clear debts of millions… Details inside
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