- A crypto trader lost millions swapping $50.4 million USDt for just 327 AAVE tokens via Aave and SushiSwap.
- A MEV bot executed a sandwich attack during the transaction, profiting nearly $9.9 million.
- The user proceeded despite clear warnings about extraordinary slippage from the protocol interface.
- Aave founder pledged to refund fees, highlighting ongoing UX challenges in DeFi.
A cryptocurrency trader suffered a catastrophic loss of millions on March 12 while attempting a swap on the decentralized finance protocol Aave, with a Maximal Extractable Value (MEV) bot also exploiting the transaction for substantial profit. The user aimed to convert a full $50.4 million USDt (USDT) balance into Aave (AAVE) tokens using the CoW Protocol aggregator and SushiSwap decentralized exchange. However, the execution resulted in receiving only 327 AAVE tokens, worth approximately $36,000—a staggering loss as the swap paid around $154,000 per AAVE compared to its market price of $114.
Consequently, an MEV bot performed a “sandwich attack” on the pending transaction. This bot front-ran the order by flash-borrowing $29 million wrapped Ether tokens from Morpho to inflate the AAVE price ahead of the user’s trade. It then sold the inflated tokens on SushiSwap, securing a profit of nearly $9.9 million. Aave founder Stani Kulechov posted to X that the protocol interface had warned the user about the “extraordinary slippage” due to the unusually large order size. He stated the user confirmed the warning on their mobile device and proceeded with the swap.
Meanwhile, CoW DAO said on X that “despite clear warnings that showed the user they would lose nearly all of the value of their transaction, and despite needing to explicitly opt into the trade after seeing the warning, the user chose to proceed with their swap.” The DAO acknowledged this incident shows “DeFi UX still isn’t where it needs to be to protect all users” and promised to refund any associated protocol fees. Kulechov sympathized with the user, stating Aave would attempt to contact them to return $600,000 in fees collected from the transaction.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
