Cardano Holder Loses $6 Million in Failed Stablecoin Swap

TLDR

• A Cardano wallet dormant since 2020 lost over $6 million by swapping 14.4 million ADA tokens in a low-liquidity pool for an obscure stablecoin called USDA
• The holder swapped $6.9 million worth of ADA for only $847,695 worth of USDA stablecoin, losing approximately 90% of the token value
• Blockchain investigator ZachXBT discovered the error after the user conducted a small test transaction just 33 seconds before the massive swap
• The transaction temporarily pushed ANZA’s price to $1.26 before it dropped back to $1.04, showing the dangers of using illiquid trading pools
• It remains unclear if the holder intended to purchase USDA, a stablecoin with a market cap of only $10.6 million

A Cardano holder who kept tokens inactive for five years accidentally lost more than $6 million in a failed stablecoin swap. The error occurred when the user traded through a pool with extremely low liquidity.

Blockchain investigator ZachXBT reported the incident on November 16. The user swapped 14.4 million Cardano (ADA) tokens worth $6.9 million for 847,695 US dollar Anzens (USDA) stablecoins.

The wallet address “addr…4×534” had been dormant since September 13, 2020. The holder made a test transaction of 4,437 ADA at 4:06 PM UTC on Sunday. The multimillion-dollar swap to USDA happened just 33 seconds later.

The transaction caused ANZA’s price to spike to approximately $1.26 according to CoinGecko data. The price then fell back to $1.04. This price movement demonstrates how large orders in small liquidity pools can create extreme price swings.

The Risks of Illiquid Trading Pools

Blockchain data shows the crypto trader never held USDA stablecoins before this transaction. The stablecoin has a market cap of just $10.6 million. This makes it unclear whether the holder intentionally wanted to purchase this lesser-known token.

The incident highlights the dangers of using illiquid pools for large transactions. When liquidity is low, even moderate-sized trades can result in unfavorable execution rates. Traders can lose substantial amounts of value in seconds.

The loss represents approximately 90% of the holder’s ADA value. The swap turned nearly $7 million into less than $850,000. This type of error shows why traders should verify pool liquidity before executing large orders.

Similar Errors in Crypto Markets

This is not the first major error in crypto markets this year. In October, stablecoin issuer Paxos accidentally minted 300 trillion PayPal USD (PYUSD) stablecoins. The company burned the entire amount approximately 22 minutes later.

Omer Goldberg, founder of Chaos Labs, posted on X that Aave would temporarily stop trades for PayPal USD. Ethereum blockchain data showed Paxos minted the stablecoins at 7:12 PM UTC. The company then transferred them to an inaccessible wallet.

The minted amount represented more than twice the global GDP. It also exceeded 125 times the number of U.S. dollars in circulation. The error briefly caused concerns across the digital asset space.

PYUSD maintained its dollar peg but slipped slightly by around 0.5% according to Nansen data. Community members called it one of the most visible fat-finger moments in blockchain history.

The Cardano holder’s error and the Paxos incident both demonstrate how technical mistakes can create temporary market disruptions. The USDA stablecoin received 847,695 tokens from the swap while the holder walked away with a $6.05 million loss.

The post Cardano Holder Loses $6 Million in Failed Stablecoin Swap appeared first on CoinCentral.