Last updated on May 12th, 2026 at 08:17 pm
A cryptocurrency trader lost approximately $50.4 million in a single transaction after executing a high-slippage swap through the Aave protocol interface.
The trader attempted to exchange $50.43 million worth of aEthUSDT, an interest-bearing version of Tether, for aEthAAVE but received only 324 tokens valued at roughly $36,000. Despite multiple interface alerts and a mandatory checkbox confirming “extraordinary slippage” and severe price impact, the user proceeded with the trade on a mobile device.
JUST IN: Crypto trader turns $50 million into $35k in a single swap after ignoring multiple slippage warnings.
— Polymarket (@Polymarket) March 13, 2026
How did a $50 million trade result in a 99% loss?
The catastrophic outcome was driven by insufficient liquidity in the specific trading pair relative to the massive order size. The Aave interface routes swaps through the CoW Protocol, a decentralized exchange (DEX) aggregator that utilizes solver auctions to find execution paths. In this instance, the solver routed the funds into a SushiSwap pool that contained only about $73,000 in liquidity for the AAVE pair, causing the price to skyrocket during execution.
well… today I managed to completely nuke $50M on a swap.
tried to buy AAVE with $50M USDT, got the slippage warning, clicked the confirmation box anyway on my phone thinking it would be fine.
it’s not fine
ended up receiving 324 AAVE
second worst trade i’ve ever done after…
— PerpetualCow.hl (@PerpetualCow) March 12, 2026
Aave engineers confirmed that the system functioned as intended, with the trader receiving a 0.7% surplus from the auction mechanics despite the abysmal rate. Analysis showed the initial quote presented to the user already indicated they would receive fewer than 140 AAVE tokens for the $50 million, effectively signalling a 99.9% price impact before the user even signed the transaction.
What happens to the lost funds, and will there be a refund?
While the bulk of the $50 million was lost to price impact and captured by arbitrage traders and MEV bots, Aave Labs founder Stani Kulechov announced the protocol would attempt to return approximately $600,000 in fees collected from the trade. CoW DAO similarly pledged to refund its portion of the transaction fees as a gesture of goodwill. On-chain analysts, including Lookonchain, have linked the wallet involved to Garrett Jin, noting that the funds were recently consolidated from multiple Binance withdrawals.
This event mirrors previous liquidity-related incidents in the DeFi space. For context, large on-chain swaps often require sophisticated routing or “order splitting” to avoid such pitfalls. In late 2025, similar market distortions occurred during high-volatility periods when oracles mispriced certain assets like wstETH, leading to unintended liquidations.
Meanwhile, DefiPlanet reports on the decentralized finance platform Aave surpassing $1 trillion in total lending volume, a landmark achievement that places the protocol on par with the operational scale of major global banks. Aave’s evolution from an experimental project into a dominant liquidity engine, bolstered recently by institutional adoption through initiatives like Aave Horizon
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