A single casually handled transaction on a mobile phone turned $50 million into peanuts overnight. A crypto wallet holding $50.4 million in USDT from Binance tried to swap it all for AAVE tokens through decentralized exchanges CoW Protocol and SushiSwap on Thursday. The wallet ended up with just 327 AAVE tokens worth roughly $36,000—an almost total wipeout. The user effectively paid $154,000 per AAVE token against a market price of around $114. The incident exposes how brutally unforgiving decentralized finance can be even for big-money players.
Bot Executes Sandwich Attack
The incident happened because of a Maximal Extractable Value (MEV) bot moving too fast. These bots continuously monitor pending blockchain transactions, hunting large orders to exploit. After spotting the massive incoming AAVE purchase, the bot flash-borrowed $29 million in wrapped Ether from lending protocol Morpho, drove up AAVE’s price on Bancor just ahead of the user’s trade, then dumped those tokens on SushiSwap once the order landed. The bot walked away with $9.9 million.
Warnings Were There
What makes this case hard to look away from is that both platforms warned the user clearly. Aave founder Stani Kulechov confirmed on X that the protocol’s interface flagged extraordinary slippage tied to the order’s unusually large size. The user read the warning on their mobile device and tapped through anyway.
CoW DAO reinforced this fact on X, saying the user actively opted into the trade despite seeing alerts showing near-total value loss. The organization admitted the episode points to gaps in DeFi’s user experience that continue to leave everyday traders exposed.
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Both platforms moved quickly to limit the fallout. CoW DAO said it would refund all protocol fees connected to the transaction. Kulechov said Aave plans to track down the user and return $600,000 in fees the protocol collected from the ill-fated swap.
