Aave details March 12 CoW Swap incident involving $50.43M trade and unveils "Aave Shield" protection

Aave published a postmortem on X regarding the March 12 incident, in which a user attempted to trade approximately 50.43 million aEthUSDT (worth roughly $50.43 million) for aEthAAVE via integrated CoW Swap routing and ultimately received only around 327 aEthAAVE, valued at approximately $36,000. Onchain data cited by Aave show the funds were first converted to WETH in the Uniswap V3 USDT/WETH pool, then used to buy AAVE through the SushiSwap AAVE/WETH pool, producing about 331 AAVE that were deposited into Aave V3 to mint aEthAAVE. According to Aave, the quote displayed a price impact as high as 99.9% and a warning that it "could result in 100% value loss," and the team concluded the loss stemmed from extreme price impact in a low-liquidity market rather than slippage. Aave plans to roll out an "Aave Shield" mechanism that will by default block swaps with price impact above 25% unless users manually disable it for higher-risk trades, and noted the transaction generated about $110,000 in swap fees that may be refunded to users who reach out and complete verification.