A crypto user lost around $50 million in a single transaction on Thursday after performing a large token swap that triggered a massive slide.
Blockchain data shows that the wallet attempted to exchange $50,432,688 aEthUSDT – an interest-bearing token representing Tether’s USDT stablecoin deposited in Aave’s decentralized lending protocol on the Ethereum network – with aEthAAVE – similar version of Aave governance tokens – through the CoW Protocol.
The transaction was executed with more than 99% slippage due to thin liquidity in the relevant trading pools, leaving the wallet with only about 327 aEthAAVE tokens, worth about $36,000 after the trade. The difference in value was quickly captured by arbitrage traders and network intermediaries.
Large losses caused by slippage occasionally occur in decentralized finance (DeFi) when traders attempt to execute unusually large orders against shallow liquidity pools. In such cases, automated arbitrage systems quickly exploit the price shifts created by the trade.
Stani Kulechov, founder of the Aave protocol, said the transaction went through despite several warnings presented to the user before confirming the transaction.
“Earlier today, a user tried to buy AAVE using $50M USDT through the Aave interface,” Kulechov said in an X post. “Given the unusually large size of the single order, the interface warned the user of extraordinary slippage and required confirmation via a checkbox.”
According to Kulechov, the user accepted the warning on their mobile device and proceeded with the trade, expressly acknowledging the risk of high slippage.
“The transaction could not be moved forward without the user expressly accepting the risk,” he said, adding that the CoW Swap routers were working as intended and following standard industry practices.
Still, the result was “clearly far from optimal,” Kulechov said.
Kulechov said Aave plans to contact the affected user and return about $600,000 in fees collected from the transaction.
The loss comes just days after around $27 million was liquidated on Aave in what some market participants say may have been caused by a temporary pricing issue involving the wstETH token.
