Breakdown of What Actually Happened (from public analyses and on-chain data shared on X)
The victim/user swapped ~$50.4M in wrapped USDT (aEthUSDT) for AAVE via the Aave interface → routed through CoW Protocol.
Due to insane slippage (liquidity on the path was nowhere near deep enough), they received only 324–331 AAVE ($36k–$37k at the time).
This created a huge price dislocation across DEX pools (primarily Uniswap/SushiSwap for the relevant pairs).
An MEV searcher/bot immediately spotted it and executed atomic backruns/arbitrage to correct the price:One major backrun involved reversing the direction (e.g., selling AAVE back to ETH/USDT to capture the mispricing).
Additional smaller arbs and related txs also profited.
Where the ~$50M "value" flowed
User received: ~$36k–$37k in AAVE → ~99.9% loss.
CoW Swap solver fee: ~$619k (normal protocol cut).
DEX fees + minor arbs: ~$3–4M scattered.
MEV bot profit: ~$10M–$12.5M net (after paying for inclusion).
Titan Builder received from the bot: 16,927 ETH
($34.8M at the time)
this was the block bid/tip the bot paid to get its bundle included.Titan forwarded 568 ETH ($1.2M) to the actual block proposer (a Lido validator).
Titan kept: ~$33.6M (builder's net take).
Total MEV extracted in that block: ~$44–$45M+ (almost the entire misplaced value, minus small protocol/DEX fees).
Why this shows maximizationIn MEV-Boost/PBS, builders like Titan compete by submitting the highest-bidding block to relays. The bot had to outbid everyone else to include its profitable bundle → it paid the absolute top dollar Titan could demand for that slot.
@titanbuilderxyz didn't leave money on the table they extracted ~73% of the total MEV value created by the mispriced order (builders typically take 60–80% in big MEV events, bots keep the rest after costs).
If the bot had paid less, another searcher could have outbid and taken the arb → so the payment was pushed to the economic maximum the opportunity supported.
Insane story...
Some guy tried to buy $50M of $AAVE on his phone, like 3% of the total supply, tapped through <INSANE SLIPPAGE AHEAD> warnings, ended up with only $40K of AAVE. Block builder made off with ~$40M, Aave refunds $600K of fees.
Net result, AAVE token is down. 💀
Huge!
The SEC just gave DeFi a broker exemption.
Uniswap UI, MetaMask Swap, DEX aggregators DON'T need to register as a broker-dealers.
DeFi apps just can't get paid for order flow, offer investment advice, or touch user funds - all fair.
Exactly the clarity we needed - the right approach.
I remember SBF telling us in 2022 they'd never allow DeFi apps to not be regulated as broker-dealers (and that only he could save us....by selling out DeFi to the U.S. gov).
Wrong again Sam.
And as for this Atkins/Pierce SEC....they just keep being awesome.
Dear @PancakeSwap. Looks like you copied our code without asking. It is violation of its license. Not only it is illegal: historically it showed to be unwise for those who did it this way in other regards.
In any case. If you want to enjoy using stableswap without legal problems and to borrow some of our expertise to keep users SAFU - you still can contact us for licensing and collaboration.
26 PREDICTIONS FOR 2026
From Bitcoin to DeFi, Layer 1 and Layer 2 blockchains, Artificial Intelligence, and much more
The Galaxy Research team is back with predictions for the year ahead (and also an assessment of our predictions last year) 👇