Aave Reports $50M aEthAAVE Swap Incident, Plans Shield Feature to Block High-Impact Trades

Aave published a report on an incident in which a user attempted to swap approximately $50.43 million in aEthUSDT for aEthAAVE through the CoW Swap router integrated in Aave's interface, where the order size exceeded available liquidity and CoW Swap displayed a price impact of up to 99.9%. The interface showed a warning and required the user to check a box stating "I understand I may lose 100% of my value," yet the user manually approved the transaction on mobile and received only about 327 aEthAAVE worth roughly $36,000, while the Aave protocol itself remained unaffected because the loss occurred at the third-party protocol level. The transaction generated around $110,000 in fees, which Aave said will be refunded to the user after identity verification, and Aave announced a forthcoming "Aave Shield" feature that will by default block trades with price impacts above 25%.