"I've been advised aave is perfectly safe so here's the potential trading strategy. Not financial or legal advice, but if you do make 9 figures on this feel free to send a tip
Note that starting with more initial capital increases success odds and profit percentage."
~ Avraham Eisenberg
Here are the steps that look like Flash Loans but is simply Borrowing and Lending procedure;
At 60% LTV for Ren, you can profitably,
1. Lend 100M USDC.
2. Borrow 85M of Ren.
3. Account B, lend 85M Ren, Borrow 50M USDC.
Nest cost here is 50M.
With another 50M, you can buy at least 125M worth of Ren (because you can borrow 60% of LTV).
Ren market cap is about 125 million currently so 125 million in buying pressure at minimum doubles it and realistically 5xes at least. This means you will gain 5 times more.
In case you 4x (gain 4 times more) ,you can borrow additional 150M on Account B for a 50M profit.
This is actually somewhat more because you'd be buying the Ren at a lower average price.
The 125 million in buying pressure might 10x and then you would be able to borrow 100M against your initial 100M capital.
Is It Wise for Eisenberg to Share Such Information With the Public?
A popular crypto user says that it is unwise to share such information publicly, especially after Coinbase threatened to sue users who don't refund cash they got after exploiting a vulnerability on the exchange.
The vulnerability was similar in that a Currency in Georgia was trading at $250 instead of $2.50.
According to Route2Fi,
" I recommend no more tweets like this for the sake of the people, the crypto industry, and your business. But if this continues I have no choice but to add you to notifications for news/narrative trades."
However, other users say that it is important for any person to reveal such vulnerabilities. Otherwise, how would the exchange know that it is vulnerable? It also protects the exchange from hackers.
According to MediumNobody, the information is beneficial to the crypto ecosystem. It is safe because traders are making profit, which would otherwise be exploited by hackers and the exchange would loose billions.
"Lol, when this is beneficial for crypto ecosystem. All platforms can create prevention mechanism because of that. Or would you prefer to hear that someone hacked Aave for 500 mils?"
Another user, banana, replied,
"You clearly don't know how AAVE or most MM on DeFi work."
Is It Safe to Use the Strategy?
Well, cryptocurrency is a risk. Several people have employed the strategy. However, it is unclear whether it is profitable or not.
Some trading strategies are high risk and Aave might sue you. However, if you're not stealing but simply trading, go on ahead.
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