Cryptocurrency Trader Loses $50M on High-Slippage AAVE Trade
A $50 million AAVE trade gone horribly wrong has left a cryptocurrency trader reeling. The user attempted to purchase AAVE tokens using roughly $50 million in USDT, but ended up with only 324 AAVE tokens due to high slippage.
The transaction was executed through the Aave interface and routed via CoW DAO, which triggered warnings about the extreme price impact before completion.
Aave founder Stani Kulechov confirmed that the trading interface displayed clear alerts about the risk, requiring the user to explicitly acknowledge it before proceeding. Despite these warnings, the trader completed the swap on a mobile device, accepting the high slippage conditions.
High slippage occurs when large transactions exceed available liquidity, causing prices to move dramatically due to automated market-making mechanisms. In this case, the unusually large order pushed the price beyond expected levels, resulting in minimal token return for the user.