$50M TRADE INCIDENT ON AAVE AND COW PROTOCOL
A collateral swap executed through Aave v3's front end (powered by CoW Protocol) on March 12 resulted in a user selling ~$50M of aUSDT for ~324 aAAVE tokens at a catastrophic loss due to compounding failures: a fill-or-kill order on an illiquid pair at extreme size, a stale 12M gas ceiling that rejected better-priced solver quotes, and the winning solver failing to execute onchain twice before abandoning the order. The remaining solver's degraded bid executed with significant backrun activity capturing most of the lost value within the same block. CoW Protocol and Aave are now exploring mandatory cooling-off periods and split-order prompts for high-impact trades, while investigating a possible mempool leak from the private RPC submission.