Aave Crypto Rolls Out New Safeguard Dubbed AAVE SHIELD After $50 Million Slippage Incident

Key Insights:

• Aave responds to a slippage incident in which a crypto user lost $50 million.
• Aave SAFEGUARD to block with slippage exceeding 25%.
• AAVE price reclaims $120 as bullish momentum builds up.

It’s business as usual for the AAVE crypto after its native platform, the AAVE protocol, just experienced a major incident. This could likely be due to how fast the company has reacted with a workable fix.

AAVE crypto continues to build on the momentum that it carried from last week. But before we get to that, let’s take a look at why Aave protocol just kicked off the week in the spotlight.

The AAVE protocol just experienced an incident that had less to do with its price action and more to do with user protection. Recent reports revealed that a user lost over $50 million while attempting a swap on the Aave protocol.

Preliminary reports revealed that the swap was affected by a 99% slippage event. The user attempted to swap over 50 million aEthUSDT for aEthAAVE.

Unfortunately, the pool used for the swap had low liquidity. The user only got 327 AAVE valued at just $36,000.

Aave Crypto Rolls Out Fix For The Slippage Problem

The AAVE protocol reacted quickly as word spread about the massive loss that the individual suffered. The platform rolled out Aave SHIELD, a new feature designed to tame the extreme slippage.

The feature was reportedly designed to block trades when slippage reaches the 25% threshold. Aave also reassured users about the safety of the platform, noting that the incident did not underscore any impact on the protocol.

Meanwhile, the Aave crypto gave a detailed explanation of how the incident occurred. The incident occurred mainly because the trade was attempted in a market with low liquidity.

While this may offer some reassurance to users, respondents described it as a critical measure towards protecting users. Aave protocol also confirmed that it would work towards restoring the funds to the affected user.

AAVE Price Surges Past $120 As The Bulls Extend Their Reign

The isolated incident did not have a significant impact on its price action. In fact, the Aave crypto extended the same bullish momentum that it maintained from last week.

AAVE crypto bottomed out at $103 on 8 March after previously threatening to fall below $100. It exchanged hands at $122 at the time of writing, after rallying by almost 5% in the last 24 hours at the time of writing.

AAVE price was up over 17% since last week’s lows. Moreover, its RSI recently crossed over its mid-level, signaling strong bullish momentum.

AAVE Crypto Price | Source: TradingView

Although AAVE price has recently gained upside momentum, it was still within its latest bottom range where it oscillated since the start of February. Moreover, its latest wave of demand was yet to retest the upper limit of that bottom range near $131.

In other words, the crypto may still maintain its uptrend for a while longer. Zooming out reveals that the AAVE crypto price was still heavily discounted compared to levels observed last year. For context, its press time price tag was equivalent to a 68% discount from its peak price in 2025.

Meanwhile, the Aave protocol still maintained healthy levels when it comes to lending and token trading volumes. The latter’s weekly figures hovered around $3.5 billion.

Aave Protocol Token Trading Volume | Source: Token Terminal

It is worth noting that crypto winter has certainly had a significant impact, especially on lending through the protocol. This was not surprising given that the market is often heavily impacted by bearish market conditions.

Lending also tends to improve as market sentiment improves. This means Aave protocol may experience a strong activity resurgence one the market enters recovery mode.

The post Aave Crypto Rolls Out New Safeguard Dubbed AAVE SHIELD After $50 Million Slippage Incident appeared first on The Coin Republic.