Crypto Whale Loses $50M in USDT-AAVE Swap

A crypto whale lost almost $50 million in a single trade while swapping USDT for AAVE through the Aave interface. On-chain data shows the wallet converted about 50.4 million USDT but ended up with only around $36,000 worth of AAVE tokens.

The trade ran on March 12 and routed through CoW Swap and several DeFi pools on Ethereum. In the process, the user suffered more than 99% slippage as the swap moved through thin liquidity.

Blockchain trackers link the funds to a wallet that received 50.4 million USDT from Binance roughly 20 days earlier. The user first deposited the stablecoins into Aave as aEthUSDT, then tried to swap the entire position into AAVE governance tokens.

How the USDT–AAVE Swap Went Wrong

According to Aave founder Stani Kulechov and multiple DeFi analysts, the whale used the Aave interface on a mobile device, where the UI showed an “abnormal slippage” warning. The interface required the user to tick a checkbox confirming acceptance of the extreme price impact before the trade could proceed.

Despite that warning, the whale approved the transaction. The order then exited Aave as USDT, passed through Uniswap V3 and other venues, and hit a tiny AAVE/WETH pool on SushiSwap with only about $70,000 to $80,000 in liquidity.

That final leg effectively drained the pool and sent the price of AAVE sharply higher for the duration of the swap. Arbitrage bots and MEV searchers captured most of the difference, leaving the trader with roughly 324 AAVE instead of the thousands they likely expected.

Aave and CoW Swap Say Protocols Worked as Designed

CoW Swap said the transaction was executed exactly according to the parameters in the signed order. The project emphasized that the interface displayed a clear price-impact warning and that there was no indication of any exploit or malicious behavior.

Aave engineers also said the core issue was not a hidden bug but “extreme price impact” caused by trying to push a huge trade through shallow spot liquidity. The quote screen already showed that 50 million USDT would return fewer than 140 AAVE before fees, yet the user still chose to proceed.

Even so, Aave Labs said it is attempting to contact the wallet owner. The team also pledged to refund roughly $600,000 in fees that Aave earned from the transaction.

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