I just heard a very difficult story about a trader who literally lost $50 million in a single swap. This really feels like a nightmare scenario for anyone.

So what happened? A user attempted to trade $50.43 million worth of aEthUSDT for aEthAAVE using the CoW Protocol. But because the liquidity pool was too small for such a large transaction, the slippage reached 99 percent—almost everything was lost. The user only received around 327 aEthAAVE worth $36,000. The difference was taken by arbitrage traders and network intermediaries. A massive loss indeed.

The interesting part is that the Aave interface itself warned the user—displaying alerts about extreme slippage and asking for confirmation. But on mobile, the warning didn’t seem as clear, and the user decided to proceed anyway. Stani Kulechov, the founder of Aave, posted about this on X and explained that the CoW Swap router worked exactly as designed. But obviously, the outcome was terrible for the user.

Now, the good news: Aave is planning to refund around $6 million in fees charged on the transaction. So at least there’s some accountability. The CoW Protocol did what it’s supposed to do, but clearly there’s no protection for such massive slippage scenarios.

There’s also a related issue—just a few days before this, there were $27 million positions liquidated on Aave. Some market observers think it might be connected to a temporary pricing issue with wstETH. So there’s definitely something bigger going on in the ecosystem.

This is a painful reminder that even in decentralized protocols, you can still get wrecked if you’re not careful with trade sizes and liquidity depth. Lesson learned the hard way.