TechFlow reports that on March 16, Aave published an incident report titled “Users Who Incurred Losses When Swapping aEthAAVE.” A user attempted to swap approximately $50.43 million worth of aEthUSDT for aEthAAVE via the CoW Swap router integrated into the Aave interface. Because the order size vastly exceeded available market liquidity, CoW Swap’s quote indicated a price impact of up to 99.9%. The interface displayed a strong warning and required the user to check a checkbox confirming “I acknowledge I may lose 100% of value.” Despite this, the user manually confirmed the transaction on mobile and proceeded, ultimately receiving only ~327 aEthAAVE (valued at ~$36,000).
The Aave protocol itself remained unaffected; the loss occurred at the level of a third-party protocol. This transaction incurred ~$110,000 in fees, which Aave stated it would reimburse after the user completes identity verification. In response to this incident, Aave announced the upcoming launch of its “Aave Shield” feature, which will by default block transactions with price impact exceeding 25%, helping prevent users from suffering significant losses due to accidental or misinformed actions.
