DeFi User Loses $50M in Crypto Swap Gone Wrong

A crypto user attempting a $50.4 million USDT to AAVE swap on Aave via CoW Protocol and SushiSwap suffered a massive loss, receiving only $36,000 worth of AAVE. This was due to extreme slippage, where the user paid around $154,000 per AAVE token, far exceeding the market price of $114. A MEV bot further exacerbated the loss by executing a “sandwich attack,” front-running the transaction to profit nearly $10 million. The bot used flash-borrowed ETH to inflate the AAVE price before the user’s purchase and then sold the inflated tokens for profit. Aave founder Stani Kulechov noted the protocol interface warned the user about the slippage, but the user confirmed the trade. CoW DAO stated no exchange could have filled the trade at a reasonable price and will refund protocol fees. Aave intends to return $600,000 in collected fees to the user, highlighting the need for improved DeFi user experience and safeguards.

(Source：Cointelegraph)