Aave Reviews March 12 Swap Incident After User Trades 50.43M aEthUSDT for ~$36K in aEthAAVE

Aave published a post-event review of a March 12 swap incident in which a user attempted to exchange about 50.43 million aEthUSDT (valued near $50.43 million) for aEthAAVE via its frontend integrated with CoW Swap, but received only around 327 aEthAAVE worth roughly $36,000 due to the trade size exceeding available market liquidity. The protocol said the transaction was routed through third-party CoW Swap and did not affect Aave's core lending system security, with the interface displaying a price impact of up to 99.9% and a warning stating "May result in 100% value loss" that required user confirmation. On-chain data show the funds were swapped from USDT to WETH via Uniswap V3, then used to buy approximately 331 AAVE through SushiSwap before being deposited into Aave V3 to mint aEthAAVE, with Aave attributing the outcome to extreme price impact from a large order in a low-liquidity market. Aave plans to introduce an "Aave Shield" feature that by default blocks swaps with price impact above 25% unless manually disabled, and noted the transaction generated about $110,000 in swap fees that it may refund if the user completes its verification process.