A Dormant Wallet Awakens — and Burns 90% of Its ADA Value in Minutes
A long-time Cardano holder has suffered one of the most severe swap mishaps of the year, losing more than $6 million after executing a massive trade through a highly illiquid liquidity pool. The incident highlights how a single large transaction in a thin market can instantly erase years of accumulated value.
A $6.9M ADA Swap Turns Into Just $847K
According to on-chain data flagged by blockchain investigator ZachXBT, the user swapped 14.4 million ADA, valued at $6.9 million, for only 847,695 units of the USDA stablecoin — leaving the trader with a loss of about $6.05 million.
The wallet, identified as “addr…4×534,” had been inactive since September 2020 before suddenly performing two swaps within seconds.
The first was a small 4,437 ADA test trade. Just 33 seconds later, the user executed the multimillion-dollar swap that drained most of the value due to extreme price slippage.
Illiquid Pools Pose Severe Risks for Large Trades
The case underscores a crucial lesson: large swaps should never be executed in pools with low liquidity.
Illiquid pools cannot absorb big orders without drastically changing the price, causing users to receive far less than expected.
Because the USDA pool held limited liquidity, the massive ADA order effectively pushed the token’s execution price far below market value.
On-chain data shows the trade temporarily caused ANZA — a related asset — to spike to $1.26 before dropping back near $1.04, demonstrating how thin markets can distort prices instantly.
Did the User Mean to Buy USDA?
There is uncertainty over whether the wallet owner intended to purchase the USDA stablecoin at all.
The address had never held USDA before, and USDA itself is a relatively obscure asset with a market cap of just $10.6 million.
Some analysts suggested the user may have mistyped the token, potentially intending to swap into a different USD-denominated stablecoin.
Such errors — known as fat-finger trades — have historically caused unpredictable movements in crypto markets.
The crypto sector has seen multiple incidents caused by mistaken transactions. Last month, Paxos accidentally minted 300 trillion PYUSD, burning the tokens minutes later.
The Cardano swap mishap serves as a stark reminder:
avoid large transfers in low-liquidity pools at all costs, and double-check destinations before executing any major trade.
For long-term holders and new investors alike, one careless transaction can overshadow years of accumulation.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.