Aave Releases Post-Mortem on Swap Incident: Not a Slippage Issue, Plans to Launch "Aave Shield" Protection Mechanism

Odaily News Aave has released a post-mortem report on the March 12th Swap incident on the X platform. According to the report, a user attempted to swap approximately 50.43 million aEthUSDT (worth about $50.43 million) for aEthAAVE through the integrated CoW Swap router on its front-end interface. However, due to the transaction size far exceeding market liquidity, the user ultimately received only about 327 aEthAAVE, valued at approximately $36,000. The on-chain execution flow shows that the transaction funds were first swapped for WETH in the Uniswap V3 USDT/WETH pool, then used to purchase AAVE via the SushiSwap AAVE/WETH pool, finally generating about 331 AAVE which were deposited into Aave V3 to mint aEthAAVE.

Aave stated that this transaction occurred on the third-party protocol CoW Swap and did not affect the security of the Aave core lending protocol. The transaction quote showed a price impact as high as 99.9%, and the interface had clearly warned that it "could result in 100% value loss," requiring the user to check a confirmation box before proceeding. The root cause of this incident was the extreme price impact caused by a large transaction in a low-liquidity market, not a slippage issue. As an improvement measure, Aave plans to launch an "Aave Shield" protection mechanism, which will by default block Swap transactions with a price impact exceeding 25%. Users will need to manually disable this protection to proceed with high-risk trades. Meanwhile, this transaction generated approximately $110,000 in Swap fees. Aave indicated that if the user contacts them and completes a verification process, they will consider refunding the related fees.