A adı çıkmış market manipulator, responsible for last month’s saldırı on Mango Markets, yesterday attempted to crash the price of DeFi exchange Curve’s CRV token.
DeFi users tracked his movements on-chain. They rallied around the token, pumping the price by over 40% and leading to Eisenberg’s short position being liquidated. However, DeFi lending protocol Aave was left with 2.64 million CRV (worth approximately $1.6 million) in bad debt upon liquidating the collateral.
The strategy involved building up a hefty short position on Aave, borrowing a total of 92 million CRV against 57 million USDC collateral over the last few days. Then 20 million CRV was transferred to OKEx exchange and it was presumably dumped — shortly after, the price began a rapid descent.
It appeared that Eisenberg was targeting the liquidation of Curve founder Michael Egorov’s large long position, also on Aave. At a CRV price of $0.26, this position would be automatically liquidated by Aave, selling the CRV collateral, pushing the price further down and further boosting the short’s profitability.
Strategies like this work when on-chain liquidity is low. Lending protocols such as Aave and Compound tend to limit the assets accepted as collateral in order to reduce the potential for the type of extreme price manipulations that allowed Eisenberg to drain Mango Markets.