Aave released a recap of the Swap incident: users exchanged $50.43 million worth of aEthUSDT for approximately $36,000 worth of AAVE, due to a liquidity shortage that caused an extreme price shock.
PANews reported on March 15 that Aave released a recap report of the Swap incident on March 12, stating that a user attempted to exchange approximately 50.43 million aEthUSDT (worth approximately $50.43 million) for aEthAAVE through the integrated CoW Swap route on its front-end interface. However, due to the transaction size far exceeding market liquidity, the user ultimately only received approximately 327 aEthAAVE, worth approximately $36,000.
Aave stated that the transaction occurred on the third-party CoW Swap protocol and did not affect the security of Aave's core lending protocol. The transaction quote showed a price impact of up to 99.9%, and the interface clearly indicated that it "may result in a 100% loss of value," requiring users to check the confirmation box before continuing the transaction.
The on-chain execution process shows that the transaction funds are first exchanged for WETH in the USDT/WETH pool of Uniswap V3, and then AAVE is purchased through the AAVE/WETH pool of SushiSwap, eventually generating about 331 AAVE and depositing them into Aave V3 to mint aEthAAVE.
Aave stated that the root cause of this incident was the extreme price impact of a large transaction in a low-liquidity market, rather than slippage. As an improvement measure, Aave plans to launch the "Aave Shield" protection mechanism, which by default blocks swap transactions where price impact exceeds 25%. Users will need to manually disable this protection to continue high-risk trading. Additionally, this transaction incurred approximately $110,000 in swap fees; Aave stated that if the user contacts them and completes the verification process, they will consider refunding the relevant fees.
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