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.

Make us preferred on Google

What to know:

• A crypto trader lost about $50 million in a single transaction after swapping interest-bearing aEthUSDT for aEthAAVE through CoW Protocol.
• Large losses by slippage occasionally occur in decentralized finance (DeFi) when traders attempt to execute unusually large orders against shallow liquidity pools, with arbitrage bots exploiting the price dislocation.
• Aave founder Stani Kulechov said the interface had warned the user about extraordinary slippage and required explicit confirmation, which the user confirmed on their mobile device.

A crypto user lost roughly $50 million in a single transaction on Thursday after executing a large token swap that triggered massive slippage.

Blockchain data shows that the wallet attempted to swap $50,432,688 aEthUSDT – an interest-bearing token representing Tether's USDT stablecoin deposited into the Aave decentralized lending protocol on the Ethereum network – for aEthAAVE – similar version of Aave governance tokens – through the CoW Protocol.

The transaction 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 roughly $36,000 after the trade. The difference of the 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 rapidly exploit the price dislocations created by the trade.

Stani Kulechov, founder of the Aave protocol, said the trade went through despite multiple warnings presented to the user before confirming the transaction.

“Earlier today, a user attempted 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 about 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, explicitly acknowledging the risk of high slippage.

"The transaction could not be moved forward without the user explicitly accepting the risk," he said, adding that the CoW Swap routers functioned as intended and followed standard industry practices.

Still, the outcome was "clearly far from optimal," Kulechov said.

Kulechov said Aave plans to contact the affected user and return roughly $600,000 in fees collected from the transaction.

The loss comes just few days after about $27 million was liquidated on Aave, in what some market participants say may have been caused by a temporary pricing issue involving the token wstETH.

More For You

Here is what $100 oil means for Bitcoin network

Research shows that only 8% to 10% of global Bitcoin hashrate runs in oil-sensitive power markets, suggesting that geopolitical shocks may affect BTC prices more than mining costs.

What to know:

• Luxor estimates that only 8 to 10 percent of global Bitcoin computing power is located in electricity markets linked to crude prices, mainly in Gulf countries such as the UAE and Oman.
• Luxor argues that geopolitical shocks pushing oil above $100 are more likely to impact mining through Bitcoin’s price rather than electricity costs.

Stricter MiCA rules could thin crypto industry across the EU, says Swiss wealth manager

13 minutes ago

SEC's advisory group backs tokenized securities push, outlines how to keep it safe

1 hour ago

Donald Trump to hold another Mar-a-Lago lunch for his token holders

2 hours ago

The Emperor has no wallet

5 hours ago

U.S. Senate votes to ban CBDCs in housing bill that may face trouble in the House

6 hours ago

Ethereum layer-2 developer OP Labs cuts roles to 'narrow focus'

6 hours ago

Bitcoin holds $70,000 level as surging oil prices and credit issues have stocks tumbling

7 hours ago

Vitalik Buterin says Ethereum should be used as a simple digital bulletin board

7 hours ago

Cathie Wood's Ark Invest says quantum computing is a long-term risk for bitcoin, not an imminent threat

7 hours ago

BlackRock debuts staked ether ETF as demand grows for yield in crypto funds

11 hours ago

Tether invests in Ark Labs to make Bitcoin ready for stablecoins and payments

9 hours ago

Bitcoin selling intensifies across all wallet sizes despite price holding near $70,000

8 hours ago