A crypto user unexpectedly lost millions during a swap on the Aave decentralized finance (DeFi) protocol, while a Maximal Extractable Value (MEV) bot profited nearly $10 million from the transaction.

A wallet recently funded by Binance containing $50.4 million in USDT attempted to swap the entire amount through the CoW Protocol and SushiSwap, aiming to convert it into the Aave token (AAVE).

Unfortunately, the user only received 327 AAVE tokens, valued at about $36,000, after paying around $154,000 per AAVE, which was significantly higher than the market price of approximately $114.

Compounding the issue was the MEV bot, which executed a “sandwich attack” on the transaction. MEV bots monitor pending blockchain transactions, targeting larger orders to inflate the token prices before selling for profit.

The bot effectively front-ran the transaction by borrowing $29 million in wrapped Ether from Morpho, driving up the AAVE price prior to the user’s transaction and selling the inflated tokens on SushiSwap for nearly $9.9 million in profit.

Warnings Ignored by User: Aave

Automated liquidity providers like SushiSwap utilize pricing algorithms that consider slippage based on trade size, which can lead to considerably altered transaction values.

Aave’s Stani Kulechov shared on X that the protocol’s interface had cautioned the user regarding the significant slippage from the unusually large order size.

“The user acknowledged the warning on their mobile, yet chose to proceed, accepting the high slippage,” Kulechov stated.

CoW DAO remarked that despite clear alerts regarding potential value loss, the user opted to continue with the swap. The DAO stated,

“No DEX, aggregator, or liquidity pool could accommodate this trade at a reasonable price.”

Kulechov expressed sympathies for the user, stating Aave would contact them to refund $600,000 in fees incurred during the swap.