Crypto Whale Loses Nearly $50 Million on a Single AAVE Swap After Ignoring Slippage Warning
A wallet on the Ethereum network lost approximately $50 million in a single onchain swap on AAVE Thursday evening, in what may be the largest slippage-driven loss in the history of decentralised finance. Slippage refers to the difference between the price a trader expects to receive and the price they actually get, it occurs when an order is large enough to exhaust available liquidity at the expected price.
The wallet attempted to swap 50,432,688 aEthUSDT, a deposit token representing USDT held inside the Aave lending protocol, for aEthAAVE, the equivalent AAVE deposit token, via CoW Protocol, a trade-routing system integrated into the Aave interface. It received 324 AAVE tokens, worth approximately $36,000 at current prices.
Kulechov confirmed the incident on X. The interface had warned of “extraordinary slippage” and required a manual checkbox before executing. The user confirmed on mobile and proceeded.
Aave engineer Martin Grabina clarified the core issue was not slippage but a 99% price impact, the interface had already shown a quote implying $50 million in USDT would return fewer than 140 AAVE before fees. “It was already a very bad rate,” Grabina wrote. CoW Protocol confirmed no exploit: “The transaction executed according to the parameters of the signed order.”
Where the Money Went
The $50 million did not vanish. The swap bought every available AAVE token in the relevant liquidity pool, a shared pool of assets used to facilitate trading on decentralised exchanges, at increasingly unfavourable prices until liquidity ran out, with the remainder settling in the pool. MEV bots, automated programs that monitor pending transactions and insert trades to capture profit, moved faster than anyone else.
On-chain data confirmed by Arkham Intelligence showed that Titan Builder, one of Ethereum’s largest block-building firms, which constructs blocks by selecting and ordering transactions to maximise profit, extracted approximately $34 million in Ethereum from the transaction before routing the proceeds to Coinbase. A second bot captured close to $10 million. The MEV operators together took more from the trade than the user received in AAVE.
Kulechov said Aave Labs will attempt to return approximately $600,000 in fees generated by the transaction, the protocol’s fee taken from the swap, not compensation for the slippage loss, which has no reversal mechanism.
Professional traders executing orders of this scale typically split them across multiple smaller transactions or use algorithms designed to minimise market impact. Kulechov said the incident has prompted internal discussion about whether stronger guardrails beyond a checkbox warning are needed for orders of extreme size.
The Questions It Raises
Two competing theories have circulated beyond simple user error. The first is that the trade was deliberate, a money laundering mechanism that destroys value to obscure the origin of funds, with MEV bots as unwitting recipients.
The second is that the user misread the interface on mobile, confusing a 99% price impact for a standard 1% slippage tolerance. Neither has been confirmed. The wallet has not been publicly identified.
The incident arrives one day after Aave faced a separate oracle issue that caused approximately $26 million in erroneous liquidations across 34 accounts. Aave monthly active users hit an all-time high of 155,000 in February 2026, roughly double the level six months prior.
The $50 million swap briefly pushed AAVE’s spot price up approximately 5% before it retraced, a reminder that catastrophic individual trades can still move markets when the underlying asset is thinly liquid.
