The dark side of DeFi

[knowngunman]

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As seen in the image above, a trader lost $50 million in less than a minute. Yes, you read that right, $50 million just gone and can not be reversed.

Imagine swapping $50 million for 324 AAVE tokens that worth just $36,000. That's what happened here. The victim used a DeFi app to performed the said transaction. Although, a warning pop up notifying the user of a high slippage but the victim still proceed to confirm the transaction and it's gone. This is not a hack case, neither a scam but just the way the system is designed to function.

One more reason why some people find it difficult to get into crypto. This is not like a bank where you can contact customer care for assistance and expect refund.

AAVE team offered to compensate the victim with $600, 000 from the transaction fee but this change nothing considering the amount lost.

As a trader, you have to be aware that every step requires your utmost attention. Every warning must be carefully studied to know whether to proceed or cancel. I believe this mistake could be avoided if he'd pay attention to the warning.

[Charles-Tim]

Although similar topic is existing already but not well explained like you explain it: https://bitcointalk.org/index.php?topic=5577240.msg66503107#msg66503107.

That is one thing I do not like about some exchanges, how would they design an exchange that will take so much from people in a way that the money can not be recovered.

Some people can still make mistake like this.

Best is to lick this thread. Also it belongs to altcoins board not trading discussion board.

[cryptoaddictchie]

Imagine swapping $50 million for 324 AAVE tokens that worth just $36,000. That's what happened here. The victim used a DeFi app to performed the said transaction. Although, a warning pop up notifying the user of a high slippage but the victim still proceed to confirm the transaction and it's gone. This is not a hack case, neither a scam but just the way the system is designed to function.

Since the app put a warning for the transaction its the user fault to miss the details. Thats how non custodial dex works. If the liquidity isnt enough for a pool it doesnt mean you can get the enough balance when swapped.

Just wondering with this trade should the price of AAVE does pump more? Since its probably concentrated pool whoch doesnt much have tokens for that huge amount.

The user must have use cex for this big amount to swapped on. Im guessing his a defi maxi, trying to do some retro for an airdrop but since there is no liq on their pool its got rekt badly.  Do you know the name of the app?

[slaman29]

What is the guy doing using an wallet that has $50M to just swap like this haha. I would be cold storaging that all the time.

How does someone who has that much USDT have so little regard for how slippage works, while using a lesser known protocol too.

Just like that, indeed. Self custody not for everyone.

The user must have use cex for this big amount to swapped on. Im guessing his a defi maxi, trying to do some retro for an airdrop but since there is no liq on their pool its got rekt badly.

How do you mean? A CEX tx doesn't even happen on chain. And a Defi maxi doesn't use a cex

[cryptoaddictchie]

How do you mean? A CEX tx doesn't even happen on chain. And a Defi maxi doesn't use a cex

That $50m worth of stablecoins can be swapped easily via cex like Binance getting all the aave tokens he need. Precisely, my thought since he is using a protocol on dexes means he probably trying to trigger something here related to defi as it works sometime as retro for some airdrops to be eligible but for this big I guess its too much funds just to interact for an airdrop. Maybe chances that he is absent minded when doing this or realize it but already clicked it and kaboom. Gone. But honestly I dont mnow the goal of the trader with that huge funds, might not be for an airdrop but something else. I will look around whats the cause of this. Ciao.

[FinneysTrueVision]

Some people are speculating that it might be Garret Bullish who made the mistake based on onchain evidence.
https://www.binance.com/en/square/post/300990383699281

The error happened when they were doing a collateral swap on Aave. It’s very strange that they would want to swap their collateral from a stable, highly liquid asset to a volatile, illiquid token.