Insufficient liquidity causes trouble! Suspected Cardano founder's address exchanges 6.9 million USD ADA with a 90% loss.

An old address holding 6.9 million USD worth of ADA incurred slippage losses exceeding 6 million USD due to trading with the low liquidity niche stablecoin USDA pool. Meanwhile, on-chain trackers discovered that these funds can be traced back to the Genesis Block of Cardano in 2017, sparking discussions about whether it is a founding entity or an insider.

6.9 million exchanged for 840,000? Old address mistakenly entered a low liquidity pool, resulting in a loss of over 6 million USD.

On-chain detective ZachXBT pointed out that a wallet holding tens of millions of ADA for over five years made a significant mistake on the DEX today.

He mistakenly exchanged 14.45 million ADA worth 6.9 million USD ( for only about 840,000 USD worth of USDA stablecoin. Due to the extremely low liquidity in the trading pool, large buy and sell orders experienced severe slippage, resulting in a direct loss of over 6.05 million USD.

Sourse: Yu Jin

33 seconds before the transaction, the address had previously conducted a small test transaction of 4,437 ADA, however, the subsequent large operation clearly did not check the pool depth.

Selected the wrong trading pair or did you slip? The wallet has never held USDA.

The transaction not only caused the wallet to incur a loss of over 90%, but also impacted the trading pair. It caused the price of USDA to soar to $1.26 at one point, which was then gradually arbitraged back down to around $1.02.

This transaction raises many questions, including why the address chose to exchange this niche stablecoin USDA, and why it did not split into multiple sell orders to reduce market impact, after all, the wallet had never held USDA before.

On-chain investigation: Funds originate from the Cardano Genesis Block, suspected to be from the founding entity?

The incident sparked more discussion on X, and crypto researcher bobcorn discovered that the source of these ten million ADA can be traced back to the Cardano Genesis Block ), the first on-chain transaction of Cardano nearly 10 years ago.

He explained:

The ADA initially received by this address comes from the Genesis Block distribution, or is related to founding entities such as the Cardano Foundation.

From 2017 to 2020, there was almost no movement, like the management wallets of specific institutions or facilities, which were only transferred to new addresses after the Shelley upgrade.

Starting from 2023, addresses will regularly rotate the staking delegation ( every month, with behavior patterns similar to assets managed by the official.

Therefore, this wallet is also considered one of the genesis addresses, and it is speculated that this may not be the operation of an ordinary retail investor, but rather an accidental operation by an early core entity.

Not the first time: Fat finger mistakes are still market risks

This incident has once again drawn attention to the “Fat-Finger )Fat-Finger(” risk in the cryptocurrency market.

Last month, stablecoin issuer Paxos had just minted 300 trillion PYUSD due to an internal error, which is three times the global GDP )GDP(. Even though it was destroyed within minutes, it still raised concerns about the transparency of stablecoin issuance.

)Paxos accidentally minted 300 million USD stablecoin PYUSD, printing three times the global GDP in one click(

The crypto market is surrounded by risks, and a single wrong command or pool can instantly lead to asset loss. This time, the ADA whale has become the latest case.

This article discusses the trouble caused by insufficient liquidity! Suspected Cardano genesis address exchanged 6.9 million USD ADA with a loss of 90%, first appearing in on-chain news ABMedia.