Aave Shields Against High-Risk Swaps After $50M Loss

Aave is introducing Aave Shield, a new safety feature designed to prevent losses during high-risk transactions. The move comes after a user lost over $50 million while swapping tokens through CoW Swap last week.

The loss occurred when a user attempted to exchange 50.4 million USDt for AAVE via CoW Swap on Thursday. Due to thin liquidity and infrastructure failures, the user received only $36,500 worth of AAVE, resulting in a loss of just over $50 million. An MEV bot executed a sandwich attack during the transaction, capturing nearly $10 million in profit.

Aave published a post-mortem on Saturday confirming that Aave Shield is in deployment. The feature will block swap transactions where the price impact exceeds 25%, and users who wish to proceed with higher-risk trades must disable the protection manually.