Alameda Research, a decentralized finance (DeFi) lending platform, recently faced a significant loss of funds due to liquidation on Aave.
The liquidators were trying to consolidate funds from multiple Alameda wallets into a single, multi-sig wallet. However, their efforts resulted in a loss of $72,000 from an on-chain position on the Aave platform.
According to crypto intelligence firm Arkham, the liquidators first removed extra collateral from the funds, putting them at risk of liquidation.
As a result, the position was liquidated twice in a span of nine days, and the creditors will not be able to recover the lost funds.
Furthermore, the liquidators also made nine failed transactions while trying to remove large amounts of LDO tokens, without noticing that the tokens were still vested.
They were eventually able to transfer the funds in smaller amounts of 10,000 LDO tokens after the failed attempts.
In the past two weeks, approximately $1.4 million worth of crypto has been transferred to the creditors’ multi-sig wallet from multiple wallets associated with Alameda.
The liquidators began consolidating the funds 10 hours after reportedly losing $1.7 million worth of digital assets in a hack in December.
According to Arkham, there are still over 50 Alameda wallets with assets locked inside, the largest of which is worth over $14 million.
This highlights the importance of proper management and oversight of funds in the complex and volatile world of DeFi.
