Just recently, top Ethereum decentralized finance project Aave began transitioning its native token LEND to a new token called AAVE. LEND had become outdated as it was named after the project’s predecessor, ETHLend, and lacked certain technical and economic functionalities.

While this transition was done was good intentions, it didn’t turn out for everyone.

One user accidentally burnt their funds when they sent a large sum of AAVE to the contract address shortly after they converted their LEND into AAVE. The user has since gone inactive across linked wallets.

How over $1 million worth of AAVE was burnt with one transaction

As first noted by crypto Twitter account TokenOops, which tracks accidental transactions made with ERC-20 tokens, one user burnt 28,050 AAVE worth over $1,000,000 two weeks ago when they sent the coins to the contract address of AAVE as opposed to an actual receiver.

This is the first time this transaction was publicly noticed, with the tweet sharing this transaction gaining over 350 likes and dozens of retweets.

The exact value of the burnt funds as of this article’s writing and as per CryptoSlate data is $11,105,000.

The supply burnt represents around 0.175 percent of all AAVE that will ever be circulated. Most of the coins are already in circulation while a few million coins more will be distributed through governance or through liquidity mining incentives.

When funds are sent to a contract address, nothing can be done with those funds most of the time. More often than not, there is no public function or even admin function that one can call to withdraw coins sent to a contract address.

Little is known about the user, as there seemingly has been no attempt to call for help on Aave forums.

But, their address activity indicates that the user had just transformed their LEND tokens into AAVE tokens, then tried to send them to an address. The issue is, instead of transferring it to an external address they owned, they sent it right to the contract.

Weirdly, just before the burned $1,000,000 of the top DeFi coin, they sent other ERC-20 token holdings worth tens of thousands of dollars to a normal Ethereum address, suggesting there must have been some bug or miscommunication that caused this to happen.

The AAVE burn was the last transaction they made from that address. Other addresses linked to this unfortunate user have not budged either.

This is notably not the first time something like this has transpired. As CryptoSlate reported previously, a user sent $1 million worth of the USDT stable coin directly to the Swerve token contract, where his coins have no purpose.

The post This user lost $1m of top DeFi coin Aave (AAVE) by accident: here’s why appeared first on CryptoSlate.

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