Projects Aave and CoW Swap have provided differing accounts of an incident in which a user lost over $50 million while exchanging tokens.
CoW's Account
The aggregator team believes the failed transaction with AAVE resulted from a combination of factors:
- an "execute or cancel" order on an illiquid pair with a massive volume;
- an outdated gas limit in the verification system;
- a solver that failed to execute;
- possible data leakage about the operation from the private mempool.
— CoW DAO (@CoWSwap) March 14, 2026
During the quote request phase, three solvers provided prices. The best offered around $5 million AAVE for $50 million—a loss of about 90%. The verification system, with a strict limit of 12 million gas (outdated code, as explained by CoW), filtered out these options.
The only verified quote from Solver A offered approximately 329 AAVE—150-200 times worse than the unverified alternatives. This became the basis for the order's limit price.
When executing, the situation worsened. Solver E found a more favorable route and won two auctions, but none of the transactions made it into a block. After two failures, it stopped participating, leaving only a weaker solver with a worse price.
“There is no mechanism in the auction to track such a scenario,” CoW noted.
Developers also noted a potential data leak from the mempool. The transaction was sent via a private RPC but was marked "confirmed in 30 seconds." This occurs if the deal is spotted in the public queue before being included in a block. An investigation is ongoing.
Aave's Account
Aave believes the main reasons for the incident are market illiquidity and the user's choice. The report traced the transaction route: the solver converted aEthUSDT to USDT through Aave V3, then exchanged it for WETH on Uniswap V3, and finalized the operation through a SushiSwap pool with only $73,000 in liquidity.
— Aave (@aave) March 14, 2026
The team pointed out that the widget displayed a warning of "high price impact (99.9%)" and required the user to check a consent box. The user confirmed the operation from a mobile device. The funds are still accessible to him, but he has not made contact.
In response, Aave launched Aave Shield. This new feature automatically blocks any exchange operations with a price impact above 25%. Users can only disable this protection manually in the settings.
Previously, project founder Stani Kulechov mentioned plans to return about $600,000 in fees. In the latest update, this figure was revised to $110,368 (25 basis points). The accuracy of this amount is confirmed by metadata from the CoW Swap aggregator.
This amount has also become a point of contention within the Aave community. Since December 2025, governance participants have been unable to decide where to allocate the funds: to the general treasury of the DAO or to the address of developers from Aave Labs.
MEV Factor
Notably, official publications do not mention MEV bots, which profited significantly from the trader's mistake. According to Arkham, the Titan Builder algorithm made about $34 million in ETH. Another bot earned $9.9 million through a successful sandwich attack.
Titan Builder extracted $34M worth of ETH out of this debacle
— Emmett Gallic (@emmettgallic) March 12, 2026
They immediately sent all proceeds to Coinbase https://t.co/B9j8p2czTD pic.twitter.com/5Ll8mZxiEB
CoW only mentioned a "significant backscreen" and listed addresses but did not use the term "sandwich" or disclose the mechanics. Meanwhile, the integration of CoW Swap was positioned as protection against MEV.
Recall that on March 10, Aave experienced a oracle failure that led to erroneous liquidations of positions in the wstETH token amounting to about $26 million.