By Mark Ackman
Aave Network Still In Awe of Failed Exploit Attempt
One of the most shocking stories past week in the decentralized finance (DeFi) sector was the failed hack attempt suffered by the Aave network.
The attempt was reportedly made by Avi Eisenberg who was the same hacker who successfully hacked Mango Markets.
It was in the month of October when Eisenberg targeted Mango Markets and siphoned off approximately $100 Million.
Last week, the hacker targeted a much bigger DeFi project namely Aave wherein the total value locked (TVL) exceeds $3.64 Billion.
As was with the case of Mango Markets, the failed exploiter of Aave carried out its activities while remaining within the parameters of the Aave network.
Reportedly there was no breaching of protocols, no hack, non-exploitation of any loopholes nor was there any backdoor or forced entry.
Although Eisenberg failed in the attempt, the story will go down in the history as one of the most interesting ones.
Eisenberg’s Exploitation Design
Noticeably, Eisenberg remained active on the Aave network since 14th November. The exploiter borrowed a loan of 92 Million CRV tokens against USDC collateral of $50 Million.
Thereafter, Eisenberg started to spend CRV tokens in multiple transactions which he carried out on the OKEx exchange.
Later he used more USDCs, which he had actually swapped against CRV tokens, for obtaining a further loan in CRV. His plan was to repeat the swap and borrow cycle repeatedly so as to cause a shortage in CRV.
Why Eisenberg Wanted to Crate CRV Shortage?
One of the reasons why Eisenberg aimed at creating a shortage was that he wanted CRV’s founder to liquidate his $48 Million CRV loan. Eisenberg’s objective could have been achieved if CRV’s value had declined below $0.29.
As a matter of fact, Eisenberg did come very close to bringing down CRV’s value to that point but he injected more collateral for avoiding destruction.
Another reason that Eisenberg may have tried to create the shortage could be that he was estimating Aave’s strength and limits.
Could Be a Glimpse of a Bigger Picture
Surprisingly Aave didn’t collapse but in the process, CRV’s founder did lose about $10 Million. However, it remains unclear to this day as to what exactly was the plan Eisenberg wanted to execute.
The plan may be bigger than one’s expectation or it could simply be a failed attempt.
One cannot also ignore the probability that instead of causing a loss to CRV, Eisenberg wanted to actually cause grave harm to Aave.
One thing was obviously evident which was that during his failed attempt, Eisenberg was also busy posting tweet messages.
What is good however is that the Aave network remained safe and the only losing party in the attempt was CRV’s founder namely Michael Egorov.
Still, it is an alarming situation for the entire crypto industry. In the running year, the number of hack attacks has increased in the cryptocurrency industry.
The DeFi protocols have become a playing ground for hackers who are able to find loopholes and are able to use them to their advantage.
So far, billions of dollars have been lost to online hack attacks but there does not seem to be any end to it.
The industry needs to find a solution to these problems as soon as possible as it is constantly hampering the overall reputation of the crypto-verse.