A cryptocurrency trader suffered a $50.4 million loss after approving a market order on the Aave protocol with extreme slippage tolerance, resulting in the exchange of $50.4 million USDT for just $36,000 in AAVE tokens. The remaining $14.4 million was absorbed through slippage and extraction by maximal extractable value (MEV) operators.
The user confirmed the transaction despite receiving two separate warnings from the protocol interface and explicitly approved a 99% slippage parameter—effectively granting the system permission to execute the trade at any price. According to blockchain data, $34 million of the lost funds flowed to block builder Titan through MEV-bots, while an additional $600,000 was collected as protocol fees. Aave founder Stani Kulechov responded that the protocol functioned as intended by issuing warnings and requesting explicit confirmation before execution.
Kulechov noted that alternative routing through CoWSwap would have actually returned the trader a 0.7% price improvement relative to market conditions at the time of execution. The Aave team is currently attempting to contact the trader to recover at least the $600,000 in protocol fees. The trader retains $302 million in holdings across other wallets, indicating the loss represents a significant but not catastrophic portion of their portfolio.