$2M Ether swap ends in $14K after low liquidity routing mistake

A trader has lost nearly $2 million in an Ether swap after a decentralized exchange router sent the transaction through a low-liquidity pool, allowing a same-block arbitrage trade to capture almost the entire value.

According to blockchain security firm GoPlus Security, the trader spent 1,126.4409 ETH, worth about $2.01 million, but ultimately received only 5,775.66 Lighter (LIT) tokens valued at roughly $14,500 after the transaction was routed through a thin AVAIL/WETH liquidity pool.

GoPlus Security said the incident was not a traditional sandwich attack but a “textbook case of same-block backrun extraction.” 

The firm explained that the trader purchased AVAIL tokens at a heavily inflated price because the routing contract directed a large amount of wrapped Ether into a pool with limited liquidity, creating a severe price imbalance.

Low-liquidity route led to massive loss

Transaction data shared by GoPlus showed that 1,116.8661 ETH was first exchanged for 6.68 million AVAIL tokens on Uniswap V3. Those AVAIL tokens were then swapped for about 14,508 USDC before the proceeds were converted into 5,775.66 LIT tokens on Uniswap V4.

Within the same Ethereum block, a backrunning searcher identified the distorted pricing and executed an arbitrage transaction. According to GoPlus Security, the searcher spent only about 0.3942 WETH to obtain 2,154 AVAIL tokens from another source before selling that small amount into the inflated AVAIL/WETH pool.

The security firm said the trade extracted approximately 1,072.46 WETH from the pool, after which 1,018.25 ETH was transferred to Titan Builder as a builder payment. GoPlus added that Titan Builder received the largest share of the value captured during the incident, but did not take funds directly from the victim’s wallet.

Explaining the mechanics behind the loss, GoPlus Security said the victim executed the AVAIL purchase at roughly 120 times the price that could later be realised in the market. Once the large swap distorted the pool’s pricing, only a small amount of correctly priced AVAIL was needed for the arbitrage bot to withdraw most of the newly added Ether.

Traders urged to review transaction routes

Following the incident, crypto trader Ruslan Khairullin advised users to inspect the execution path of decentralized exchange transactions before approving them, instead of relying solely on the displayed output amount.

Commenting on the trade, Khairullin said it demonstrated the cost of confirming a transaction without carefully reviewing its routing details.

Separate data from DefiLlama showed Titan Builder has generated about $112.6 million in revenue from block-building services so far this year. The platform’s largest single-day gain came in March, when it captured roughly $34 million in arbitrage profits during a separate maximal extractable value incident involving the CoW Protocol.