The exploiter of the DeFi loan portal Mango Markets in Solana has identified himself and described his behavior as “a highly profitable trading strategy.”
According to Avraham Eisenberg, who describes himself as a “digital art dealer,” he was responsible for the $100 million scam that affected Mango Markets earlier this week. In a tweet on Saturday, he claimed, “I was part of a team that used a highly profitable trading method last week.
Eisenberg Claims Their Actions Were Legitimate
Eisenberg maintained in his admission that even if the development team did not completely foresee all the effects of defining parameters in the way that they are, their “activities were legitimate open market actions, utilizing the protocol as designed.”
Eisenberg pointed out that Mango Markets lost money as a result of the exploit, and that the insurance fund wasn’t enough to cover all liquidations. As a result, user funds worth over $100 million were lost.
Eisenberg compared the procedure to how auto deleveraging operates on exchanges, which is a risk management tool used when a position is completed with negative equity and recoups some profits from successful traders to maintain the safety of all users’ funds.
How Eisenberg and Team Altered Mango Markets
On the Solana blockchain, Mango Markets is a decentralized exchange (DEX). The governance token for the system is called MNGO, and it has a market cap of slightly over $26.8 million.
According to reports, the exploiter funded an account with the stablecoin USDC before taking a “outsized stake” on the Mango token perpetual futures market (MNGO-PERP).
The price of the MNGO increased by 5x to 10x within a short period of time on a variety of external exchanges, which Mango’s pricing oracles utilized as their benchmark for the price of the MNGO-PERP. The same user may then borrow and withdraw almost $100 million worth of BTC, USDT, SOL, mSOL, and USDC as a result of the account’s increased unrealized profit, the researchers claimed.
At that time, the Mango team disclosed their intention to pursue a direct resolution with the team responsible for the exploit. “We believe the most constructive way to approach this is to continue communicating with those responsible for the incident,” they said.
Notably, Eisenberg was a lead developer of Fortress DAO, a fork of Olympus DAO based on the Avalanche blockchain, where he was previously charged with stealing Treasury funds.
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