Aave Plans New Feature After Swap Event Causes Major Price Impact

On March 15, Aave released a review of a swap event where a user exchanged approximately $50.43 million worth of aEthUSDT for about $36,000 of aEthAAVE, resulting in a price impact of around 99.9%. According to BlockBeats, the transaction occurred through a third-party swap protocol, leaving Aave's core lending protocol unaffected. The incident was attributed to the user executing a large order in a market with low liquidity and confirming a high-risk quote. In response, Aave announced the upcoming launch of the Aave Shield feature, which will automatically block swaps with a price impact exceeding 25%.