This week, an audacious hacking attempt aimed at the $3.64 billion DeFi lending platform Aave was carried out. The attacker refers to himself as "the highly profitable trader," and he was the one who carried it out.

Similar to the hack that was performed on Mango, the attacker just worked inside the confines of the company's programming. As a direct consequence of this, there was not a single instance of hacking, fraud, or tax evasion.

However, the attacker was unsuccessful with their most recent attempt, which raises another another point that on-chain crypto investigators should take into consideration. The sequence of events that took place is detailed below.

A Chronology Of The Events

Since the 14th of November, the hacker has accumulated a total of 92 million CRV (Curves native tokens) on Aave, which are currently worth $39 million, while simultaneously using $50 million worth of USDC stablecoin as collateral.

After that, he transferred a sizeable quantity of the CRV coins to a centralized exchange known as OKEx in order to sell them or keep them for himself. After that, he borrowed more Curve tokens using the USDC tokens that he had acquired after exchanging them for the CRV, and then he repeated the process.

This demonstrates that he constructed a significant short position by utilizing the Curve Governance asset. However, the question that needs answering is why he decided to construct a compact recreation vehicle. That question cannot be satisfactorily answered in a simple manner.

However, the primary reason is that Eisenberg wants to pay off the enormous CRV loan that Curve founder Michael Egorov took out. According to information provided by DeFi Llama, the company's founder has a massive loan on Aave worth $48 million that was supposed to be paid off, but the price of CRV has fallen to less than $0.29.

Nevertheless, Egorov did come dangerously close to being liquidated; however, he refused to do so and instead added an additional enormous amount of collateral in order to avoid bankruptcy.

The second premise is that Eisenberg was, in the beginning, attempting to determine the limits of Aave. Even if Eisenberg were to withdraw a significant portion of the lender's available capital, Aave would still be responsible for close to $1.6 million in delinquent debt.

The fact that the Curve founder was not liquidated and that Aave has survived the initial scare raises the question of whether or not this indicates that the attacker has been successful. The answer could be yes, taking into consideration that Eisenberg is said to have lost $10 million, depending on what the activities on the chain have shown to be the case.