Aave to Roll Out Aave Shield After $50M User Loss

Aave said it will deploy a new feature, Aave Shield, to block swaps with a price impact above 25% after a user lost about $50 million while using the Aave interface last week. The protocol added that users will need to manually disable Aave Shield to proceed with high‑risk trades.

The incident happened on Thursday when a user tried to convert $50.4 million in USDT for AAVE via CoW Swap but received only $36,500 worth of Aave. Aave said a lack of liquidity and other infrastructure failures produced a loss of just over $50 million, and that a Maximal Extractable Value bot executed a sandwich attack that profited nearly $10 million.

Aave noted the user signed the transaction despite multiple warnings on the platform, including alerts about a "high price impact" and a notice that the route might return less due to low liquidity or small order size. The user also ticked a confirmation box stating, "I confirm the swap with a potential 100% value loss," Aave said.

aave shield, aave, cow swap, usdt, aave token, price impact, sandwich attack, mev bot, liquidity, user loss