Crypto Trader Loses Nearly $50M in Aave Swap After Confirming Slippage; Protocol Attempts $600K Refund

A single wallet executed a massive token swap on CoW Protocol through the Aave interface that turned roughly $50.43 million of aEthUSDT into just a few hundred aEthAAVE tokens, leaving the account with about $36,000 in value and an effective loss of roughly $49.96 million.

“Crypto investor turns $50 million into $36,000 in one botched move Aave founder Stani Kulechov said the interface displayed multiple slippage warnings, which the user manually accepted on a mobile device”

CoinDesk

Blockchain records show the wallet received only around 324–327 aEthAAVE/AAVE tokens after the trade, creating the multimillion-dollar gap that was rapidly captured by arbitrageurs and network intermediaries.

CoinDesk

The loss stemmed from extreme price impact and thin liquidity in the pools used for the trade rather than a simple UI slippage bug: Aave engineer Martin Grabina said the quoted rate already implied a disastrous execution ("50M USDT -> <140 AAVE") before fees and slippage.

The use of a single large market order against shallow liquidity produced more than 99% price impact that arbitrage bots exploited.

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Both reporting and on-chain data indicate the quote presented to the user was already a very poor rate, which made the outcome inevitable once the order was accepted.

Aave’s leadership and engineers have framed the incident as a combination of design choices and user decisions: founder Stani Kulechov and others said the Aave interface routed the order through CoW Swap and displayed multiple slippage warnings that the user explicitly accepted on a mobile device,

“Crypto investor turns $50 million into $36,000 in one botched move Aave founder Stani Kulechov said the interface displayed multiple slippage warnings, which the user manually accepted on a mobile device”

CoinDesk

and that the infrastructure worked as designed even though the final result was "far from optimal."

Aave staff emphasised that the user had to confirm the risky action to move the transaction forward.

Aave said it will try to contact the trader and return roughly $600,000 in fees generated by the transaction, acknowledging a partial remediation even as most of the lost value was already captured by arbitrageurs.

The team also signalled it intends to investigate stronger guardrails to help prevent "extreme user errors" while balancing permissionless access,

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and noted the incident as part of broader growth in Aave usage.