A crypto trader suffered a loss of nearly $2 million after a decentralized finance (DeFi) swap was routed through a low-liquidity liquidity pool, leading to one of the largest recent trading mishaps on Ethereum.
The incident, first flagged by Lookonchain and later analyzed by GoPlus Security, involved a swap of 1,126.44 ETH worth about $2.01 million. Instead of receiving assets close to that value, the trader ended up with only 5,776 LIT tokens valued at roughly $14,200.
😱 How Did $2M End Up Swapped Into Just $14K?
This was a real, highly imbalanced backrunner arbitrage, not a classic sandwich attack. Titan Builder captured the majority of the value from this incident, but not by “directly taking ETH from the victim’s address.” Instead, it was… https://t.co/YP7lP2FrxA pic.twitter.com/0AUSfMi1FF
— GoPlus Security 🚦 (@GoPlusSecurity) July 6, 2026
According to GoPlus Security, the loss was not caused by a hack or a traditional sandwich attack. Instead, it resulted from a same-block backrunner arbitrage that exploited the price imbalance created by the transaction.
How did the $2 million trade go wrong?
The failed transaction was routed through an AVAIL/WETH pool on Uniswap V3 that had very little liquidity. Because of the pool’s limited depth, the large ETH swap pushed the price of AVAIL sharply higher, causing the trader to buy the token at an extremely inflated rate.
The swap then continued through additional trading routes, converting the AVAIL tokens into USDC before finally purchasing LIT on Uniswap V4. By the time the transaction was completed, almost the entire value of the original ETH had been lost due to poor pricing across the routing path.
Earlier this year, Uniswap governance launched a crucial temperature check proposal to activate protocol fees across all remaining Uniswap v3 pools on the Ethereum mainnet and expand fee collection to eight additional blockchain networks.
Backrunner captured the opportunity
GoPlus Security said the incident was an example of same-block backrunner arbitrage rather than front-running.
After the large trade distorted the AVAIL/WETH pool, a backrunner bought a small amount of AVAIL at its normal market price from another source. The trader then sold those tokens into the inflated pool, withdrawing more than 1,072 WETH.
Blockchain data also showed that around 1,018 ETH was later sent to Titan Builder as a builder payment, highlighting how MEV participants profit by capturing price imbalances during block production.
Why low liquidity remains a major Defi risk
The incident highlights the risks of executing large trades through pools with limited liquidity.
When trading routes pass through thin markets, even a single large order can move prices dramatically before arbitrage traders restore balance. This can leave users paying far more than an asset’s actual market value.
The case also reveals the growing role of MEV in decentralized trading, where sophisticated participants monitor pending transactions and capitalize on pricing inefficiencies within the same block. It also reinforces the importance of smarter routing systems that can avoid illiquid pools and reduce the risk of severe execution losses.
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