How This Dormant Cardano Whale Lost $6 Million In Disastrous ADA-To-USDA Swap After 5-Year HODL
Crypto industry observers were baffled on Monday when an on-chain transaction revealed that a dormant Cardano wallet had lost more than $6 million in ADA after using an illiquid trading pool to facilitate a...
Crypto industry observers were baffled on Monday when an on-chain transaction revealed that a dormant Cardano wallet had lost more than $6 million in ADA after using an illiquid trading pool to facilitate a single stablecoin swap.
Cardano Whale Accidentally Torches Over $6 Million In A Single Swap
As flagged by on-chain investigator ZachXBT, the whale reappeared on-chain Sunday and swapped 14.4 million ADA tokens (valued at roughly $6.9 million) for just 847,695 of the US dollar Anzens (USDA) — a little-known Cardano-native stablecoin.
The Cardano user parted with over $8 per USDA at execution, a catastrophic price given that the stablecoin is intended to maintain a $1 peg and boasts a market capitalization of roughly $10.5 million. The transaction resulted in a staggering $6.05 million loss. The enormous loss occurred due to thin liquidity in the trading pool, which led to a temporary spike in the stablecoin’s price during the transaction.
The whale first made a test transaction of 4,437 ADA for a US dollar stablecoin with the ticker symbol USD at 4:06 pm on Sunday, roughly 30 seconds before executing the mispriced swap to USDA.
Before Sunday, the ADA address had not shown any activity since September 13, 2020.
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A Multimillion-Dollar Fat-Finger Mistake?
According to blockchain data, the wallet address had no previous history with USDA before that transaction, making it unclear whether the user misclicked, confused the stablecoin ticker, or assumed liquidity would hold for a market-order-style swap.
The bizarre transaction underscores risks associated with trading huge amounts of crypto assets in illiquid pools, where sizable orders can significantly affect prices and lead to unfavorable execution rates.
It’s also likely that the user chose the wrong ticker, as USDA is not widely traded, and the Cardano ecosystem has several USD-denominated assets with similar tickers.
Fat-finger errors have happened before in the crypto space. Just last month, stablecoin issuer Paxos accidentally minted 300 trillion worth of PayPal’s PYUSD stablecoin on Ethereum before burning the entire amount about 22 minutes later.
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