Cardano Wallet Loses $6 Million in Major Slippage Event
- A dormant Cardano wallet executed a swap of 14.4 million ADA, valued at approximately $6.9 million.
- The wallet had not been active since September 2020 and swapped for just 847,695 USDA, a lesser-known stablecoin.
- The transaction resulted in an effective price of over $8 per USDA, far above its intended peg of $1.
- This trade caused the price of USDA to spike to nearly $1.26 before retracing to around $1.04 as liquidity normalized.
- On-chain analyst ZachXBT flagged the transaction, highlighting risks associated with illiquid trading pools.
This incident underscores the dangers of executing large trades in thinly traded markets, as it wiped out approximately $6.05 million in value due to slippage and liquidity issues.
The reawakening of this dormant wallet serves as a reminder that even long-unactive assets can encounter modern liquidity challenges when mismanaged during trades.(Source)
