Decentralized finance (DeFi) protocol Aave eliminated the bad debt of 2.7 million of curve dao tokens (CRV) from a botched November trade by Mango Markets exploiter Avi Eisenberg, blockchain data on Etherscan shows.
The move came after Aave’s community approved the procurement of the necessary CRV tokens using the ParaSwap decentralized exchange aggregator in a governance vote concluded on Tuesday. The protocol is governed by an autonomous decentralized organisation (dao) and token holders vote on the proposals.
The action also took place prior to the activation of a major tech upgrade called Aave v3.
In November, Avraham Eisenberg roiled Aave with a trading strategy that involved borrowing tens of millions of CRV tokens from the platform. After a sudden surge in prices due to a short tightening, its position was liquidated, leaving aave with uncollectible claims in excess of 1.6 million dollars at the time.
Notably, an analysis by DeFi data platform EigenPhi found that the liquidator of the bad debt pocketed some $1 million profit due the recent upswing in crypto markets that helped lead to a 98% gain in CRV since the start of the year.
Avi Eisenberg became famous in crypto circles after draining some $110 million of digital assets from the Solana-based lending protocol Mango Markets with a self-described “highly profitable trading strategy.” He was charged with commodities fraud and commodities manipulation and arrested late December in Puerto Rico.