When DeFi Complexity Costs Millions: The AAVE Slippage Incident

Today's AAVE incident is yet another reminder of how complex DeFi protocols still are - complex enough to cause enormous losses.

Here is what happened. Through the Aave interface, a user attempted to buy AAVE tokens worth more than 50 million USDT. The system warned them about extremely high slippage, but the user accepted the risk, executed the trade, and ended up receiving only 324 AAVE. In other words, about 99.9% of the funds were effectively lost to slippage.

The only consolation is the statement from the Aave team saying they sympathize with the user and are willing to return the protocol fee - roughly $600,000.

The MEV bot operators who captured most of the profit from this trade have shown no such sympathy and have not offered to return any of the tokens they received.

This is a good moment to remember that swaps of any size on rabbit.io do not suffer from this kind of slippage. And if you choose the Fixed Rate mode, there is no slippage at all.

It is worth asking: do people really need all this DeFi complexity every time? The same advantages are available on rabbit.io - swaps without limits, without registration, and without all the extra bullshit.