TechFlow News: On March 15, Aave released a post-mortem analysis of the Swap incident: “On March 12, 2026, a user executed a token swap via the CoW Swap router integrated into the Aave interface. The user attempted to swap 50,432,688 aEthUSDT (valued at approximately $50.43 million) for aEthAAVE. Due to the unusually large size of the order relative to the shallow liquidity in the market, CoW Swap provided an extremely poor quote, which the user confirmed and accepted. Importantly, the Aave protocol itself was never at risk, as this swap occurred entirely outside the protocol—facilitated solely by the third-party CoW Swap protocol. As of now, the affected user has not contacted the Aave team.
The core issue in this incident was insufficient market liquidity—not slippage. Liquidity shortage means that, at a given price level, the market cannot supply enough assets to fulfill a large order, causing severe price deviation. The user’s order vastly exceeded the available market liquidity; CoW Swap’s quoted price was 99.9% lower than the expected market clearing price. The adverse outcome stemmed from the user’s confirmation of the quote—not from price movement during execution.
The root cause was routing a large trade through a market with insufficient liquidity, resulting in extreme price impact. The user executed the trade after explicitly acknowledging clear warnings displayed in the interface. To prevent similar incidents, Aave will introduce ‘Aave Shield’ in the Swap widget: by default, swaps with price impact exceeding 25% will be blocked, and users must manually disable this safeguard to proceed with high-risk trades. This transaction incurred approximately $110,368 in fees, which will be refunded to the user upon verification.”
