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A crypto trader lost nearly $50 million during a USDT to AAVE swap.
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The trader received only about $36,000 worth of AAVE.
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The loss resulted from extreme slippage caused by a large trade.
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The transaction executed exactly as the user confirmed.
Large Trade Leads to Extreme Slippage
A crypto whale lost nearly $50 million while attempting to swap USDT for AAVE through the interface of Aave.
According to Aave founder Stani Kulechov, the user attempted to purchase AAVE using $50 million in USDT in a single transaction.
Because of the size of the order relative to market liquidity, the swap generated extremely high slippage. The trader ultimately received only about 324 AAVE, worth roughly $36,000.
Warnings Were Displayed Before Execution
The interface warned the user about the unusually large price impact before the transaction was confirmed.
The swap was executed through CoW Swap, which later stated that the trade followed the exact parameters signed by the user.
Although there was no exploit or malicious activity, the event highlights the risks associated with executing very large trades in decentralized markets where liquidity may be limited.
Aave has said it is attempting to contact the trader and plans to return roughly $600,000 in fees collected during the transaction.
