THE BIGGEST SINGLE TRANSACTION LOSS IN DEFI? A POST-MORTEM OF HOW A USER LOST ~$50M IN ONE CLICK

Recently, a DeFi user swapped $50.4 million of aEthUSDT into just $36,000 of aEthAAVE on the Aave platform using a CoW Swap widget.

Both protocols have now released reports on the incident, detailing a mix of illiquid markets, user error, and compounding technical failures.

Here is a breakdown of what went wrong and how Maximum Extractable Value (MEV) bots capitalized on the trade:

• The Interface Warning: Aave noted that the user manually acknowledged a "High price impact (99.9%)" warning before proceeding.

• The Technical Breakdown: CoW Swap identified several system failures. A legacy hardcoded gas ceiling rejected better quotes, the winning solver failed to execute the trade on-chain, and a suspected "mempool leak" exposed the private transaction to the public.

• The Illiquid Route: Because the better quotes failed, the massive order was ultimately routed through a SushiSwap AAVE/WETH pool holding only about $73,000 in total liquidity.

• The Sandwich Attack: Because the transaction leaked to the public mempool, an MEV bot spotted the incoming order. It front-ran the trade to buy up the available AAVE, forcing the user to buy at vastly inflated prices. The bot then back-ran the trade by selling the AAVE immediately after, netting a ~$9.9 million profit.

• The Block Builder's Cut: To guarantee this exact sequence of transactions, the MEV bot paid the block builder (Titan Builder), who extracted approximately $34 million in ETH for facilitating the block.

To prevent this from happening again, aave is deploying "Aave Shield" to automatically block swaps with a price impact above 25% by default, while CoWSwap has patched its legacy gas limits.