Cardano Holder Loses Approximately $6 Million in Slippage During USDA Stablecoin Swap

Global: Cardano Whale Loses $6 Million in Illiquid Stablecoin Swap

A holder of roughly 14.4 million ADA, valued at about $6.9 million at the time of the transaction, inadvertently incurred a loss of close to $6 million when attempting to exchange the tokens for the USDA stablecoin.

Transaction Details

The trader initiated a swap that aimed to convert the ADA holdings into USDA, a dollar‑pegged stablecoin with an estimated circulating supply of $10.6 million. Because the stablecoin’s market depth was limited, the large purchase order caused the price to deviate sharply from its peg.

Price Impact and Slippage

During the execution, the USDA price rose to approximately $1.26 per token. The resulting slippage meant that the $6.9 million worth of ADA purchased only about $850,000 worth of USDA, effectively discarding roughly $6 million in value.

Possible Causes

Observers have suggested two primary explanations. One possibility is that the holder, who had not been active on the Cardano blockchain since 2020, may have been unaware of the slippage risk associated with low‑liquidity assets. Another theory posits a “fat‑finger” error, wherein the trader selected the wrong stablecoin from a list of similarly named options, some of which possess greater liquidity.

Implications for Liquidity

The incident highlights the challenges of executing large trades in markets with limited depth. Analysts note that illiquid pools can amplify price movements, leading to substantial slippage for sizable orders.

Industry Perspective

According to a comment from a decentralized finance analyst, traders should assess pool liquidity and consider splitting orders or using price‑impact controls to mitigate similar risks.

This report is based on information from Web3 is Going Great, licensed under Creative Commons Attribution 3.0 (CC BY 3.0). Analysis provided by Web3 is Going Great.