Curve DAO token plunges 14% under heavy short-selling pressure
Yet another, of many, examples of market exploits that are not hacks, but using (or abusing) the lame smart contracts that do not seem to have any financial protection measures built in - or added to an ensemble of contracts.
An unknown trader borrowed 70 million Curve DAO tokens (CRV), worth around $28 million, from Aave and sold the majority of them to drop the token's price.
erm... no doubt then buying them back at the lower price to pocket a profit.
But,
If the price of CRV falls below $0.242, a total of 185 million CRV tokens, or 10% of Curve's circulating supply, would be liquidated on Aave, according to an estimate from DeFiLlama. If that happens, it may prove to be a catalyst that may further drive down the price of CRV. This could be part of the trader's strategy.
So, this was just a warning shot - a trial run. This is also how contagion spreads from one chain to the next. Banksters may not always understand liquidity pool algorithms, but they know about lending.
I've just upvoted @blurtyield's content.