Minus $50M in One Click: Whale Loses a Fortune on $AAVE Purchase Due to Extreme Slippage

Recently, one of the market's big players, known as a "whale," attempted to buy $AAVE tokens worth $50 million through the Aave protocol interface. However, things didn't go as planned: instead of the expected amount of tokens, the trader received only $36,000 in equivalent.

According to Ethereum blockchain data, the whale's wallet address is 0x98B9D979C33dD7284C854909BCC09b51FBF97Ac8. The transaction was executed through the Aave interface, which uses CoW Swap for order routing. The trader tried to swap about $50.4 million in aEthUSDT (an interest-bearing version of the USDT stablecoin in Aave) for aEthAAVE (a similar version of the AAVE token). Due to low liquidity in pools like SushiSwap (where total liquidity was only $73,000), there was a massive price impact - over 99%.

The Aave interface warned the user twice about "extraordinary slippage" and required additional confirmation via a checkbox. Despite this, the trader signed the transaction with a 99% slippage tolerance, allowing the deal to execute at an extremely unfavorable price. As a result, the whale received only 327 AAVE tokens, worth about $36,000 at the time of the transaction.

Most of the funds didn't vanish without a trace, they went to MEV bots (Maximal Extractable Value), which specialize in profiting from such situations through sandwich attacks. One bot extracted about $34 million in ETH, passing it to the Titan Builder block builder, while another got around $10 million. Additionally, about $600,000 went to protocol fees, $3.5 million to DEX fees, and smaller arbitrage transactions.

Aave founder Stani Kulechov confirmed that the protocol worked as intended:

"The interface warned the user about extreme slippage and required confirmation."

Aave Labs plans to refund the $600,000 in fees to the trader, but the funds captured by MEV bots are likely irretrievable.

Despite the loss, the "lucky one" isn't broke. According to on-chain data analysis from Arkham Intelligence and other sources, they have at least one additional wallet with a balance of $302 million. Some analysts, like Sherlabs, even link the whale to X user @Coltonvucas based on wallet DoX.

This incident serves as a reminder of DeFi risks: large orders in low-liquidity pools can lead to catastrophic losses, and MEV bots are always on guard. Traders advise using limit orders, checking liquidity, and not ignoring interface warnings. In the crypto world, one click can cost millions, literally.