A crypto trader lost more than $50 million in Aave-wrapped USDT on March 12 after submitting a single large order through the DeFi lending protocol’s swap interface and clearing a slippage warning on his mobile device.
Data from Etherscan shows that the wallet exchanged $50.43 million aEthUSDT to 327.24 aEthAAVE through the CoW protocol on Ethereum block 24,643,151.
At the current AAVE price of $111.52, the value of the returned tokens would be approximately $36,100, leaving an implied loss of approximately $49.96 million compared to the original order size.
The transaction immediately attracted the attention of the entire crypto market due to its size and passing through one of the largest venues in decentralized finance. Aave is the largest DeFi lending protocol with over $1 trillion in cumulative loans.
After the incident, Aave contacted affected users and announced plans to refund approximately $600,000 in fees collected from the transaction. CoW Protocol said it will also refund fees sent to the CoW DAO.
Who are the victims?
Blockchain analysis platform Lookonchain said the wallet behind the swap may belong to popular crypto trader Garrett Zinn, known as BitcoinOG1011short.
According to Lookonchain, on-chain tracking has identified 13 wallets that may belong to Jin. It said these wallets received USDC or USDT from Binance on February 16 and February 20, and then became active again on Thursday, moving the funds to two new wallets.
According to Lookonchain, one of those wallets shared the same Binance deposit address as Garrett Jin.
The allegation attracted a lot of attention because Jin is already involved in other large and high-profile crypto transactions.
Last October, just before President Donald Trump threatened to impose tariffs on China, online sleuths linked him to a $735 million short position in Bitcoin opened through HyperLiquid.
The trade yielded a profit of up to $200 million, but the trade then took place just before the broader market crash, increasing speculation about the advance information.
However, Mr. Jin denied that story, saying the capital belonged to the client. He added that his team runs the node and provides internal insights, but has no connection to the Trump family.
At the time of writing, Jin had not yet confirmed the connection to the $50 million loss.
Ethereum intermediaries share windfall
While traders absorbed losses, other participants in Ethereum’s execution chain earned the spread released by their orders.
Arkham Intelligence analyst Emmett Garrick said the Maximum Extractable Value (MEV) bot arbitraged trades across the Uniswap and SushiSwap pools.
In the Ethereum market, MEV refers to the profits earned by automated traders in response to price differences created during block execution.
Gallic said the bot paid Titan Builder 16,927 ETH, the equivalent of about $34.8 million. Titan Builder subsequently paid 568 ETH (approximately $1.2 million) to Lido validators associated with the block proposal and retained approximately 16,359 ETH (approximately $33.6 million). The bot operator was left with about $10 million in profits.
As a result, Titan Builder achieved the highest return among crypto platforms in the past 24 hours, according to data from DeFiLlama.
Aave and CoW say users were warned about the transaction
Meanwhile, DeFi protocols Aave and CoW both defended their platforms over the loss, saying users received clear warning notices before orders were executed.
Aave founder Stani Kulechov explained that the user manually disabled the warning signal warning of unusually high slippage and continued the swap on mobile.
According to him:
“The transaction could not proceed unless the user explicitly accepted the risk through a confirmation checkbox.”
He described the outcome as “clearly far from optimal” and said his team would consider stronger safeguards for similar transactions.
CoW Protocol has a similar explanation, explaining:
“There are no signs of protocol abuse or other malicious behavior. The transaction was executed in accordance with the parameters of the signed order.”
The CoW also stated that available public and private liquidity sources cannot support reasonable execution for orders of that size.
Their explanations focused on execution conditions rather than software failures. This route searched for available liquidity and found a path to carry orders across venues where prices changed as size moved.
The alert flow recorded the user’s approval before the trade reached the market.
Improving the DeFi user experience
As a result, this episode brought new attention to how DeFi interfaces handle ultra-large orders.
Suhail Kakar, head of developer relations at Polymarket, said the incident does not indicate a breach of the underlying contract, but rather a gap in DeFi user protection.
He said Aave and CoW Swap executed trades as designed, but cautioned that the mobile confirmation flow should not stand between users and the $49.9 million loss due to slippage.
Kakar added that wallets and front ends should more clearly indicate expected dollar losses and introduce stronger controls for large orders, such as mechanisms to split large trades into smaller trades.
In response, Kulechov said Aave will take stronger safeguards to prevent it from happening again, while CoW said the transaction shows the need to continue improving the DeFi user experience.
According to CoW:
“Preventing users from trading leaves them with no choice and in some circumstances can lead to dire consequences (such as a market crash). That said, transactions like this demonstrate that DeFi UX is not yet in the position it needs to be to protect all users. As a team, we are currently considering how to balance strong safety measures with maintaining user autonomy.”