Dormant Cardano Wallet Loses $6 Million in Illiquid USDA Pool Trade
A previously dormant Cardano wallet, inactive since September 2020, reappeared to execute a large swap of 14.4 million ADA for 847,695 USDA. This trade triggered an estimated loss of about $6.05 million due to extreme slippage caused by the illiquidity of the USDA pool on Cardano decentralized exchanges.
The user paid over $8 per USDA token at execution, a substantially poor price considering USDA's peg near $1 and its market capitalization of approximately $10.6 million. Following the trade, the USDA price briefly spiked to around $1.26 on Cardano DEXs before settling back to roughly $1.04 as the liquidity situation normalized.
The wallet had no previous interactions with USDA, leaving uncertainty as to whether the transaction was a misclick, a confusion between tickers, or a misguided assumption about liquidity. On-chain investigator ZachXBT was the first to highlight the trade publicly via a Telegram channel.
This incident highlights the risks associated with routing large trades through illiquid pools and relying on automated market makers without adequate slippage protections. It stands as one of the year's most costly errors and serves as a reminder that dormant capital can still fall prey to modern liquidity traps on-chain.
