Crypto User Loses $50 Million in Single Aave Trade

A crypto user lost nearly $50 million in one transaction on Thursday after a large token swap triggered extreme slippage, leaving just around $36,000 in value.

The wallet attempted to swap $50.4 million aEthUSDT—an interest-bearing version of Tether (USDT) on the Aave protocol—for aEthAAVE, a staked version of Aave governance tokens, via the CoW Protocol. Due to thin liquidity in the pools, the trade executed with over 99% slippage, and arbitrage traders quickly captured most of the lost funds.

Blockchain security firm BlockSec reported that arbitrageurs extracted more than $43 million within the same block, with $32.6 million going to the block builder responsible for ordering transactions.

Aave founder Stani Kulechov said the interface displayed multiple warnings about slippage, which the user manually confirmed on a mobile device. “The transaction could not proceed without explicit acceptance of the risk,” he noted, adding that the CoW Swap routers operated as intended.

Aave plans to contact the user and refund roughly $600,000 in transaction fees. This follows another recent Aave event in which about $27 million was liquidated, possibly due to a temporary pricing issue with wstETH.