Transaction Details
Published 7/6/2026, 6:14:17 AM
The $2M loss in the ETH/LIT swap on March 11, 2023, was driven by a routing failure through a low-liquidity Uniswap v2 pool during the extreme market volatility of the USDC depegging event. A user attempting to swap approximately $2.08 million worth of assets received only 0.05 USDT after the trade was routed through a pool with negligible liquidity, resulting in a 99.99% price impact that was immediately exploited by an MEV bot [Source: https://beincrypto.com/kyberswap-user-loses-2-million-usdc-swap-0-05-usdt/].
Transaction Details
The incident occurred during a period of high stress for stablecoin pairs. The user utilized the KyberSwap aggregator to move out of a Curve LP position (3ST-USDC) into USDT.
| Metric | Value |
|---|---|
| Date | March 11, 2023 |
| Input Amount | ~2,080,000 3ST-USDC (valued at ~$2M) |
| Output Amount | 0.05 USDT |
| Transaction Hash | 0x3d184a3ddb2969451f973d390c1e18a62f87642d130a8f73f73f6927f0842990 [Note: not independently confirmed] |
| MEV Bot Profit | ~$2.04M |
Root Cause: Liquidity Exhaustion and Routing
The primary driver was the selection of an illiquid routing path. KyberSwap's aggregator identified a path that included a Uniswap v2 LIT/ETH pool [Source: https://www.reddit.com/r/CryptoCurrency/comments/11ohgbj/one_turned_203_million_into_005_and_the_other_one/].
- Low Liquidity: The LIT token (specifically Lighter) pool on Uniswap v2 had only a few dollars of liquidity at the time of the trade.
- Price Impact: Attempting to push $2M through a pool with near-zero reserves caused the price of the target asset to drop to near zero for the user.
- Aggregator Error: The routing algorithm failed to account for the catastrophic slippage or the imbalance in the pool caused by the USDC depeg volatility [Source: https://beincrypto.com/kyberswap-user-loses-2-million-usdc-swap-0-05-usdt/].
Mechanism: MEV Sandwich Attack
The loss was finalized by a Maximal Extractable Value (MEV) bot. When the user's high-slippage transaction entered the mempool, an MEV bot (identified as 0x62...327) detected the opportunity [Source: https://twitter.com/peckshield/status/1634466374722744321].
- Front-run: The bot executed a trade before the user to further manipulate the pool's price.
- User Execution: The user's trade executed at the worst possible price, effectively "donating" the value to the pool.
- Back-run: The bot then executed a follow-up trade to extract the resulting price imbalance, pocketing roughly $2.04 million in profit after gas fees [Source: https://twitter.com/peckshield/status/1634466374722744321].
The event is widely cited as a cautionary example of the risks associated with automated aggregators and the lack of stringent slippage protection during periods of extreme market de-pegging.