Crypto investor turns $50 million into $36000 in one botched move

On Thursday, one crypto user lost about $50 million in a single transaction following the massive token swap that caused huge slippages by executing ‘big-lostful’ transactions.

Using the CoW Protocol (along with its efforts to exchange $50,432,688 aEthUSDT) – an interest-bearing token for Tether’s $USDTS stablecoin deposited into the Aave decentralized lending protocol on the Ethereum network ‘for ethAAVE for similar Aaves governance tokens.

A Transaction carried out under the trade with over 99% slippage was executed because of poor liquidity in the relevant trading pools, leaving the wallet with only about 327 aEthAAVE tokens (about $36,000 after the transaction). Arbitrage traders and network intermediaries quickly captured the value difference.

The slippage of large losses in decentralized finance (DeFi) sometimes occurs when trading traders try to execute unusually large orders against shallow liquidity pools, causing huge losses. The trade dislocations of the price are quickly exploited by automated arbitrage systems in such cases, where a person’s value is rapidly taken advantage of.

The trade was ‘a process that went through, even after several warnings were given to the user before verifying the transaction and confirmed it had been done,” said Stani Kulechov, founder of the Aave protocol.

An X post by Kulechov said that one user tried to buy AAVE earlier today with $50M $USDT through the Aave interface, which was previously used in an article on Amazon. In a message to user about unusual slippage and required confirmation via ‘Checkboxes,’ the interface said ‘Given the bizarre size of the single order. ” , ‘I’m sure it is worth reading.

Using the warning on his mobile phone, Kulechov said “The user accepted that and went with the trade,” saying it was likely to be at risk of high slippage.

He said ‘The transaction could not be moved forward without the user explicitly accepting the risk, and that the CoW Swap routers worked as intended and were consistent with industry practices.

Still, the outcome was “clearly far from optimal,” Kulechov said.

Kulechov said Aave plans to contact the affected user and return roughly $600,000 in fees collected from the transaction.

Loss comes only a few days after about $27 million was liquidated on Aave, according to market participants who claim it may have been due to ‘temporary pricing issue’ of the token wstETH.

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