What Is Slippage? How a $50 Million DeFi Swap on Aave Resulted in $36,000 in Returns

TLDR

• A crypto trader lost nearly $50 million in a single token swap on the Aave platform due to extreme slippage.
• The user received only about 327 AAVE tokens worth roughly $36,000 after swapping $50.4 million.
• Multiple slippage warnings were shown before the trade, all of which the user confirmed on their mobile device.
• A MEV (Maximal Extractable Value) bot ran a “sandwich attack” on the transaction, pocketing nearly $10 million in profit.
• Aave plans to return around $600,000 in fees collected from the trade to the affected user.

A crypto trader lost almost $50 million in a single transaction on Thursday, March 12, 2026. The loss happened during a token swap on the decentralized finance protocol Aave.

The trader’s wallet, which had been recently funded through Binance, held $50,432,688 in aEthUSDT. This is an interest-bearing token tied to Tether’s USDT stablecoin, deposited into the Aave lending protocol on the Ethereum network.

The user attempted to convert the full amount into aEthAAVE, a version of the Aave governance token. The swap was routed through CoW Protocol and the SushiSwap decentralized exchange.

Because the trade was so large compared to the liquidity available in the pool, it executed with over 99% slippage. The wallet ended up with just 327 AAVE tokens, valued at approximately $36,000.

In effect, the user paid roughly $154,000 per AAVE token. The market price at the time was around $114.

What the Warnings Said

Aave founder Stani Kulechov confirmed the Aave interface had flagged the trade before it went through. He posted on X that the platform warned the user about “extraordinary slippage” due to the “unusually large size of the single order.”

The interface required the user to check a box to confirm they understood the risk. The user did so on their mobile device and proceeded with the swap.

CoW DAO also weighed in, stating that “no DEX, DEX aggregator, public liquidity pool, or private liquidity pool would have been able to fill this trade at anywhere near a reasonable price.”

The MEV Bot Attack

On top of the slippage losses, a MEV bot carried out what is known as a “sandwich attack” on the transaction.

MEV bots monitor pending blockchain transactions. In this case, the bot spotted the large incoming AAVE order and moved to profit from it.

The bot flash-borrowed $29 million in wrapped Ether from Morpho, used it to buy AAVE on Bancor and drive up the price, then sold into the user’s trade on SushiSwap. This netted the bot approximately $9.9 million in profit.

The attack pushed the price of AAVE higher just before the user’s order filled, worsening the already bad outcome.

This trade came just days after around $27 million was liquidated on Aave, which some market participants said may have been linked to a temporary pricing issue with the token wstETH.

Kulechov said Aave sympathizes with the affected user. The protocol plans to reach out and return approximately $600,000 in fees it collected from the transaction.

CoW DAO also said it would refund any protocol fees tied to the trade.

The post What Is Slippage? How a $50 Million DeFi Swap on Aave Resulted in $36,000 in Returns appeared first on CoinCentral.