User blog comment:Marco the Marine Admiral/Poll: Calamity's Final Opponent/@comment-7397924-20131028072234/@comment-7418318-20131028152409

As far as the manga goes, we only know that Cobra lost his eye.

Considering that he was still on top of Nirvana when it collapsed, it wouldn't be hard to imagine him losing the eye at that time, rather than trading it in for power.

Or maybe one of the frog jailors had some fun with him, like they did with Jellal, only their aim was off.

Or after Nirvana's collapse he woke up before the Rune Knights had him and he lost the eye when he tried to escape (apparently unsuccessful). Considering that this theory would involve the Rune Knights actually accomplishing something, it's the least likely one... even less likely than the KotSS arc being canon to the manga.