Here Is How Aave Might Pay Off $1.6 Million Bad Debt Incurred By Attemped Hack
Following the initial manipulation of the Aave Protocol’s network, where the notorious crypto trader, Avraham Eisenberg, tried his hands at carting away lots of money, two DeFi firms, Gauntlet and Llama have submitted a proposal detailing how to pay off the bad debt.
Llama And Gauntlet Submit Proposal To Pay Off Aave’s $1.6 Million Debt.
Following the initial manipulation of the Aave’s network by the notorious cryptocurrency trader, Avraham Eisenberg, where he made away with lots of money totalling millions of dollars, Avraham tried his hands on another attempt on Tuesday, which failed but not without leaving a bad debt for the Aave’s Protocol.
Eisenberg had borrowed Curve DAO (CRV) worth about $57 million on Ave while he continuously disposed of them, causing a price decline at first but it soon regained its balance. Eisenberg’s plan would have been to profit from his short position when the price declined, but as soon as the price dropped from $0.53 to $0.41, it quickly went to $0.71, leaving the trader’s plans in shambles.
According to the proposal submitted by Llama and Gauntlet, Aave’s reserved treasury fund and Gauntlet’s insolvency fund could be used to cover the $1.6 million debt.
Aave’s Protocol has about $165 million in its reserve fund, while Gauntlet’s has about 4,923 Aave tokens that are worth about $283,000 in total.
The submitted proposal stated that both the Aave Protocol’s reserved fund and the Gauntlet’s insolvency fund would be utilised to pay off the debt.
The proposal that has been submitted for a governance vote, if it is passed, will be adopted, and Llama and Gauntlet will provide more information about it.
Just How Secure Is the Aave Protocol?
From the manipulation events that happened recently, it is no doubt clear that the Aavve protocol’s security might not be the strongest.
Especially seeing the way the notorious crypto trader Avraham Eisenberg had come to the public to explain how to make extra dough manipulating the Aave’s Protocol, one would deduce that all is not well with the network.
However, plans are now underway to rectify things, as a governance proposal has been made to that effect. The proposal, if passed, will be made public, and work will commence swiftly.
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