A user who tried to exchange 50 million US dollars to AAVE through the interface of the decentralized financial protocol Aave received only 324 AAVE after receiving a quote with a strong price impact, prompting the platform to review the guarantees and refund part of the transaction fees.
Conclusion
- A trader trading $50 million USDT in Aave only received 324 AAVE after accepting the quote with about 99% price impact.
- Aave says alerts are displayed and manually verified before trades are completed.
- The protocol plans to refund approximately $600,000 and consider additional measures to protect users.
One check box, $50 million spent: Inside a disastrous Aave trade
Aave founder Stany Kulechov said unusual transactions on the interface triggered warnings before trading.
According to Kulechov, the user was warned about the unusual price impact and had to manually confirm the risk via a checkbox before continuing the exchange on the mobile device.
“Similar events happen in DeFi, but the scale of this transaction was significantly larger than what is typically seen in the space,” Kulechov said in a post on X.
He added that the platform will try to contact the user and collect about $600,000 from the business.
The transaction was made through CoW Swap, an auction-based mechanism designed to find the best available liquidity on decentralized exchanges. Kulechov said the routing infrastructure worked as intended and followed standard industry practices, although the end result was “far from optimal” for the trader.
Aave engineer Martin Grabina later explained that the issue was not related to the slider settings, a tolerance that allows prices to drift slightly between order signature and execution, but rather an extremely unfavorable quote received by the user.
According to Grabina, the order affected the prices from the beginning by almost 99%, which means that the quoted rate itself was already very unfavorable.
The user submitted a market order with the interface’s suggested slippage tolerance of 1.21%, while analytical data showed that the trader even received a small margin of 0.7% from the auction mechanism.
Grabina said the interface will display clear price impact warnings and require explicit approval before execution.
The Aave Group said it is now working with CoW Swap to analyze why liquidity sources have generated so many quotes and to explore stronger safeguards that can help protect users while preserving the permissionless nature of decentralized finance.
