Cardano whale torches $6 million in ADA-USDA swap slippage disaster

A dormant Cardano whale re-entered the market only to suffer one of the year’s most dramatic losses. After five years of inactivity, the wallet executed a swap of 14.4 million ADA into the little-known stablecoin USDA. The transaction was supposedly worth nearly $6.9 million, but the trade was routed through a highly illiquid pool. This resulted in a staggering $6 million getting wiped out in slippage.

On-chain shows that the whale had made a test transaction of a few thousand ADA before the multimillion-dollar swap. But seconds later, due to a miscalculation or ‘fat finger’ error, he made the big transaction of 14.4 million ADA but got only 847,695 USDA in return. With USDA’s market cap hovering around $10 million, the oversized trade destabilized the pool. On-chain investigator ZachXBT brought the transaction to light on his telegram channel.

Why USDA depegged?

The sudden influx of ADA into USDA’s shallow liquidity pool caused extreme price distortion. The stablecoin briefly touched $1.25 before it fell back toward its peg. Unlike larger stablecoins with deep reserves, USDA’s limited float couldn’t absorb the shock. This imbalance triggered a temporary depeg. There is no clear indicator as to why and how the trader clicked the wrong token, or whether he simply mixed up tickers, or simply assumed the pool could handle a large market-order swap.More recently, Paxos, $300 trillion stablecoin blunder on similar lines, shook markets.

Crypto slippages are becoming more common; however, to avoid such disasters, traders can use slippage tolerance settings on decentralized exchanges. Analysts stress the importance of testing with small amounts, monitoring liquidity depth, and avoiding oversized orders in thin pools.