The Twist in the Tale
On a fateful day in November, the decentralized exchange known as Curve Finance found itself in the crosshairs of a major short-seller attack. A revelation from analysts at Lookonchain zoomed in on a sinister figure—ponzishorter.eth—linked to the Mango Markets exploiter Avraham Eisenberg. This character made a colossal move by swapping a whopping 40 million USD Coin (USDC) into Aave, all in a bid to borrow Curve DAO Tokens (CRV) for sale purposes.
The Crash Begins
What transpired next was nothing short of dramatic. The price of CRV, hovering comfortably at about $0.625, plummeted faster than your motivation to go to the gym on a Monday morning, landing at around $0.464 within the week. With market chatter buzzing like bees near a blooming flower, blockchain data revealed that ponzishorter.eth wasn’t quite done yet; they borrowed an additional 30 million CRV—about $14.85 million at the time—moving these tokens over to OKX for yet another sell-off. Was this merely a personal vendetta or a darker ploy to spark a string of liquidations? We may never know.
A Desperate Defense
Amidst the chaos, a hero emerged—or at least someone trying to look heroic. Curve’s founder swooped in with a big-bucket strategy, adding 20 million CRV in collateral. Talk about a Hail Mary! At the time, Aave’s health factor for the wallet stood at 1.65, indicating a comfortable cushion against the borrowed assets. But with excitement comes caution.
The Plot Thickens
The blockchain analytics savvy folks over at Arkham had a theory of their own. They suggested that all this trading may have been nothing but bait. Eisenberg had torn a page from a strategic playbook, amassing a position exceeding $100 million on Aave. This masterminded scheme involved a distraction short of CRV tokens via Aave—an illiquid platform with low margin requirements. Could this organized chaos ultimately lead to users scrambling to buy the dip, falling right into Eisenberg’s trap? Oh, what a tangled web!
The Result: Winners and Losers
As the dust settled, CRV saw a surprising spike of 15.47%, hitting $0.5742 in the 24-hour range. Meanwhile, Aave (AAVE), unfortunately, took a hit, declining by 6.33%, settling at $53.54. In classic dramatic fashion, it echoed the earlier antics of Eisenberg, who had infamously drained $117 million from the Mango Markets protocol, remembering to keep $47 million as a ‘bug bounty.’ Just goes to show you, in the crypto world, both danger and fortune are just a transaction away.
