A cryptocurrency user suffered a nearly total loss of approximately $50 million while attempting to swap $50.4 million USDt for AAVE tokens via decentralized protocols. The transaction was executed through CoW Protocol and SushiSwap, resulting in only 327 AAVE tokens worth about $36,000 due to extreme price slippage. A Maximal Extractable Value (MEV) bot compounded the loss by conducting a sandwich attack, front-running the swap to inflate the token’s price and securing a $9.9 million profit. Project founders stated the user ignored explicit on-screen warnings about the high slippage before confirming the trade.
A crypto user lost tens of millions during a swap on the Aave protocol after an MEV bot front-ran the transaction to profit almost $10 million. The wallet, recently funded from Binance with $50.4 million in USDT, aimed to convert the full amount into AAVE tokens using CoW Protocol and the SushiSwap DEX.
The user ultimately received only 327 AAVE tokens valued at roughly $36,000, according to blockchain data. This resulted in an effective cost of around $154,000 per AAVE token against a market price near $114.
An MEV bot executed a sandwich attack by scanning the pending transaction. It front-ran the swap by flash-borrowing $29 million in wrapped Ether from Morpho to purchase AAVE on Bancor, artificially inflating the price.
The bot then sold the inflated tokens on SushiSwap for a $9.9 million profit. Automated market makers like SushiSwap adjust slippage based on pool size and trade volume.
Aave founder Stani Kulechov posted that the protocol interface warned the user about “extraordinary slippage” due to the order’s large size. “The user confirmed the warning on their mobile device and proceeded with the swap, accepting the high slippage,” he said.
CoW DAO said the user chose to proceed despite clear warnings showing they would lose nearly all value. “No DEX, DEX aggregator, public liquidity pool, or private liquidity pool (or combination thereof) would have been able to fill this trade at anywhere near a reasonable price,” the statement read.
The DAO stated such trades show DeFi user experience still lacks sufficient user protection and would refund protocol fees. Kulechov said Aave sympathizes with the user and will attempt to contact them to return $600,000 in collected fees.
“The key takeaway is that while DeFi should remain open and permissionless, allowing users to perform transactions freely, there are additional guardrails the industry can build to better protect users,” Kulechov stated.
