Anonymous Cardano whale loses $6 million due to 'misinput'

A Cardano (ADA) wallet that had been dormant for five years executed a trade in an almost illiquid stablecoin pool by mistake, resulting in the loss of roughly $6 million.

According to CoinDesk on the 17th (local time), the wallet had not moved since September 2020 but on the 16th exchanged about 14.4 million ADA (approximately $6.9 million) for 847,695 units of the small Cardano-based stablecoin 'USDA'. Extreme slippage occurred during the process, causing a loss of about $6.05 million in a single trade.

On-chain analyst ZachXBT first spotted the transaction on his Telegram channel. According to the analysis, at the time of the transaction the user paid more than $8 per USDA, which pushed USDA's price up temporarily to $1.26 before it normalized back to around $1.04 as liquidity returned.

USDA is a microcap (very small) stablecoin with a market capitalization of about $10.6 million and normally very low trading volume. The wallet had no prior USDA trading history, so it is presumed the user either confused the token ticker or made the mistake of executing a market order without considering liquidity.

The industry views this incident as a "typical failure case of executing a large trade on an automated decentralized exchange (DEX) without slippage checks." In small pools, a single trade worth millions of dollars can quickly deplete liquidity and send prices skyrocketing.

This case has drawn extra attention because the wallet, which had been inactive for five years, woke up and immediately lost its entire balance. An industry source said, "This incident shows that even dormant assets can be instantly wiped out if they encounter a liquidity trap."