The massive transaction routed through CowSwap on Ethereum resulted in a 99.9% loss.
The decentralized finance (DeFi) community is buzzing after an unidentified wallet swapped $50.4 million in USDT for just $36,000 worth of AAVE tokens.
Etherscan data shows that the wallet received 50.4 million USDT from Binance 20 days ago. Roughly two hours ago, the user deposited the stablecoins on Aave, DeFi’s largest lending protocol and attempted to swap their position for AAVE tokens.
Transaction logs show that the user placed an order via CoW Protocol, which is integrated in the Aave interface, to swap roughly 50.43M aEthUSDT for aEthAAVE. A CoW solver picked up the order and executed it through this routing:
- aEthUSDT to USDT: The solver burned 50.43M aEthUSDT via Aave V3, withdrawing 50.43M USDT.
- USDT to WETH via Uniswap V3: 50.43M USDT went into the Uniswap V3 USDT/WETH pool and came out as 17,958 WETH. At $2,050/ETH, $50.4M should yield roughly 24,600 WETH. That’s roughly $13.6 million lost to slippage at the Uniswap step alone.
- WETH to AAVE via SushiSwap: Here’s where it gets catastrophic. The SushiSwap AAVE/WETH pool currently has only about $73,000 in total liquidity. The solver pushed 17,958 WETH through this tiny pool and got back only 331 AAVE, worth $36,400. That’s effectively 99.9% slippage.
- AAVE to aEthAAVE via Aave deposit: 331 AAVE was deposited back into Aave V3, minting 327 aEthAAVE, which was delivered to the trader.
Aave founder Stani Kulechov said the user confirmed the trade despite being warned of “extraordinary slippage” by the Aave interface.
“We sympathize with the user and will try to make contact with the user, and we will return $600K in fees collected from the transaction,” he added.