Aave (AAVE)

Crypto users deserve better protections. Jessi Brooks, @kkirkbos & Jane Khodarkovsky unpack: 💩 The conflicting post-mortems for the $50 million Aave swap gone wrong 🤨 Why incidents like this conflict with DeFi's desire to stay unregulated 🥇 How DeI can introduce best execution practices https://t.co/N1UBVrBQUB

Crypto users deserve better protections. Jessi Brooks, @kkirkbos & Jane Khodarkovsky unpack: 💩 The conflicting post-mortems for the $50 million Aave swap gone wrong 🤨 Why incidents like this conflict with DeFi's desire to stay unregulated 🥇 How DeFi can introduce best execution practices https://t.co/PZDruB8tYH

On March 12, a user swapped $50.4M on Aave and got back $36K worth of tokens. A lot has already been written about it. I'm not here to talk about that. When I was digging into what actually happened, I read ~$34M went to Titan, the block builder who controlled transaction ordering for that block. After seeing the name Titan, I thought I'd write about block builder concentration in Ethereum. Ethereum has ~1M validators. It's marketed as the most decentralized chain in the world. But most blocks are controlled by the top 3 builders: Titan, Buildernet, Quasar. These companies decide what goes into 90%+ of Ethereum blocks. One million validators. very few gatekeepers. How did we get here? After the Merge, Ethereum adopted PBS (Proposer-Builder Separation). Validators propose. Builders build. Theory: healthy open market. Practice: winner-takes-all latency game. Whoever is fastest, has the best private order flow deals, and extracts the most value wins the MEV-Boost auction. Winning compounds. More blocks → more data → better strategies → more order flow → more blocks. Market has been consolidating ever since. Here's what nobody wants to say: To win the PBS auction, you build the most extractive block possible. Sandwiching users. Front-running trades. Ordering transactions to maximize value capture. These aren't side effects. They're the winning strategy. We built a system that rewards whoever harms users most efficiently. How valuable is a vast validator network when the content of every block is decided by a handful of entities optimizing purely for extraction?

Time for crypto best execution rules? In this episode of DEX in the City, hosts @kkirkbos & Jessi Brooks are joined by Jane Khodarkovsky to dive into: 🇮🇷 How an OFAC decision could impact Binance ⚖️ Why Binance would struggle to win its lawsuit against the Wall Street Journal 📍 Why there isn't much to the CFTC's recent prediction markets guidance 💌 What the CFTC's no action letter to Phantom really means 🥴 Why the $50 million Aave swap gone wrong calls for crypto best execution standards https://t.co/RUT0rHOptC

When a company converts tokens to equity, management has a financial incentive to tank the token price first. @TheiaResearch and @YI_LON walked through the mechanics with @laurashin — along with the structural fixes Morpho and Aave are actually implementing. 🎧 https://t.co/K97i0xuHNM

Long journey behind and even longer journey ahead https://t.co/2F58tk0SOA

JUST IN: @Aave is treating wrapped BTC risk like a controls problem, not a branding exercise. Wiring Chainlink Proof of Reserve into cbBTC parameters means backing signals can trigger safeguards before panic pricing does. In the next wrapper scare, automated circuit breakers matter more than ticker trust.