Aave Labs CEO revealed that a user attempting to purchase AAVE tokens using $50 million in USDT through the Aave interface received only approximately $36,000 in tokens, resulting in a loss of nearly $14 million.
The transaction was executed through CoW Swap, a decentralized exchange aggregator integrated with Aave's platform. CoW Swap stated that the trade was completed according to the parameters of the signed order and that clear warnings about price impact were displayed to the user before confirmation. The protocol contended it operated as designed, with all risk disclosures provided beforehand.
The incident highlights the risks of executing extremely large orders on decentralized exchanges, where insufficient liquidity can trigger severe slippage. While the user authorized the transaction with visible warnings, the $14 million loss underscores how price impact warnings, though technically transparent, may not adequately communicate the magnitude of losses on outsized trades in concentrated token liquidity pools.