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 $14,208 after the transaction was routed through a thin AVAIL/WETH liquidity pool. The incident occurred on July 5, 2026, near 15:55 UTC, when the trader first withdrew 1,121.441 ETH from a Binance hot wallet and then swapped the entire stack for LIT through the 0x router. The transaction was particularly brutal as the trader paid an effective price of roughly $348 per LIT, about 140 times the token's market price of $2.46 at the time of the trade.
GoPlus Security described the incident as a 'textbook case of same-block backrun extraction' rather than a traditional sandwich attack. The security 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. Within the same Ethereum block, a backrunning searcher identified the distorted pricing and executed an arbitrage transaction, spending only about 0.3942 WETH to obtain 2,154 AVAIL tokens before selling that small amount into the inflated AVAIL/WETH pool. The backrun was executed by a Titan Builder MEV bot, which profited approximately $2 million by arbitraging the mispricing created by the swap. The setup was especially dangerous because LIT's float is unusually tight, with roughly 57% of the circulating supply staked and another 145 million LIT locked in liquidity programs, making a $2 million market order capable of exhausting a pool's inventory within a single block.
Transaction data shared by GoPlus showed that 1,116.8661 ETH was first exchanged for 6.68 million AVAIL tokens on Uniswap V3, then swapped for about 14,508 USDC before conversion to 5,775.66 LIT tokens on Uniswap V4. The arbitrage bot extracted approximately 1,072.46 WETH from the pool, with 1,018.25 ETH transferred to Titan Builder as a builder payment. GoPlus Security noted that Titan Builder received the largest share of the value captured during the incident, though it did not take funds directly from the victim's wallet. The LIT received was actually Lighter, the governance and utility token for the Lighter ZK-rollup perpetuals exchange, not Litentry, an older token that shares the same ticker. Had the same 1,126.44 ETH been routed through a deep venue at market rates, it would have bought roughly 817,000 LIT instead of the 5,776 tokens received.
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. Separate data from DefiLlama showed Titan Builder has generated about $112.6 million in revenue from block-building services so far this year, with its largest single-day gain coming in March when it captured roughly $34 million in arbitrage profits during a separate maximal extractable value incident involving the CoW Protocol. The incident highlights the growing pattern of automated routing through thin liquidity pools, with aggregators like 0x routing large orders through obscure intermediate tokens when direct liquidity looks fragmented, creating opportunities for MEV bots to exploit market imbalances. Sunday's botched swap is not the first fortune lost on Lighter's order books this year - in February, a whale lost $8.2 million attempting to squeeze the platform's illiquid ARC perpetuals market, with about $2 million of the position liquidated directly on the order book.
