Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Cryptocurrency trader incurred a loss of nearly $50 million while exchanging USDT for AAVE tokens., 2026/03/13 12:22:22
An unidentified crypto trader incurred a loss of nearly $50 million while attempting to exchange aEthUSDT tokens for aEthAAVE tokens. The transaction, amounting to $50,432,688, was processed through the CoW Protocol aggregator: the user aimed to swap the interest-bearing token aEthUSDT — a variant of the USDT stablecoin from Tether — for aEthAAVE, a similar version of the governance token Aave.
Due to the substantial size of the transaction, liquidity in the trading pools was insufficient, resulting in extreme slippage — the disparity between the anticipated and actual execution price of the trade. Consequently, the user received only 327 aEthAAVE tokens valued at approximately $36,000.
The price discrepancy was swiftly exploited by arbitrage traders and network intermediaries. Blockchain data indicates that around $12 million was acquired by an MEV bot, which executed two arbitrage trades following the exchange. Approximately $3.5 million was allocated to fees and minor arbitrage activities.
Related Posts
Additionally, around $34 million was obtained by the block builder Titan as a reward for including the transactions in a block. These funds were soon transferred to a cryptocurrency exchange.
Aave founder Stani Kulechov stated that the platform had warned the user multiple times about the potential price drop. An additional confirmation was required to finalize the transaction, which the trader ultimately provided.
Aave representatives emphasized that the protocol functioned correctly: no signs of hacking or technical failures were detected. The transaction was executed according to the parameters set by the user.
The project team is attempting to reach out to the trader and is prepared to return approximately $600,000 received by the protocol in fees. The identity of the user and the reasons behind such a risky transaction remain unknown.
This incident occurred just days after positions worth over $26 million were liquidated on the Aave platform due to an oracle error that led to incorrect pricing of the wstETH token.
