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Analysis51 min read

$50M USDT→AAVE Swap — Bad Routing

0x98b...7ac8 just lost $50m in an attempt to buy AAVE using USDT through CoWSwap.

This swap was very likely executed through AAVE's UI using the collateral swap feature, as it swaps from aEthUSDT to aEthAAVE, which represent deposits of USDT and AAVE into the AAVE protocol.

The cause is mostly bad routing done by most aggregators. Below is a screenshot from matchametaxyz and CoWSwap, showing that all aggregators struggle with this. It doesn't seem to us that CoWSwap misrepresents the price of aEthAAVE.

CoWSwap aggregator comparison showing 99.28% price impact on $50M USDT to aEthAAVE swap
CoWSwap aggregator comparison showing 99.28% price impact on $50M USDT to aEthAAVE swap

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