A transaction involving a Cardano whale that lost 90% of his ADA worth in a single transaction has taught crypto users a valuable lesson.
The whale awoke after over five years of dormancy to make a transaction he now regrets, on-chain investigator ZachXBT first reported. The user, with wallet address “addr1qy,” changed 14.4 million Cardano tokens on Sunday and got just 10% of the asset’s worth at the current market price.
The transaction, which is his first since September 2020, saw him swap the ADA tokens, worth $6.9 million at the time, for a mere 847,696 US dollar Anzens (USDA). Notably, this culminates in a loss of approximately $6.05 million.
Low Liquidity Pool Choice Hunts Cardano Whale
Notably, this substantial loss followed his poor choice of liquidity pool. Specifically, the trader made the transaction in an illiquid pool and also for a lesser-known stablecoin. The large order spiked the price of USDA, resulting in a high exchange rate.
Specifically, data shows that the USDA stablecoin spiked to near $70 today before settling at $1.04, with the trade potentially contributing to this surge. The move highlights the need to swap tokens, especially large orders, on a liquid pool, as this would have averted the $6.05 million loss.
Notably, the event resulted in him missing out on a massive gain by holding his Cardano tokens for five years. At the time of his last transaction, ADA traded at $0.095. This reflects a staggering 422% growth over the period of his HODL.
Chances of a Fat Finger
While some may argue that the move was intentional, the chance of a fat finger remains. Notably, the address carried out a test transaction, converting 4,437 ADA to the USD stablecoin a few seconds before the disastrous swap for USDA, which has a market cap of $10.39 million.
As a result, the unpopular change in the stablecoin for the test transaction and the actual swap has raised the opinion that it could be a clumsy mistake on the part of the trader. For the uninitiated, a fat finger transaction refers to an error in typing or a misclick, which can have disastrous impacts on blockchain transfers.
A couple of them have been recorded in the on-chain transaction history. For context, a user paid $700,402 as Ethereum transaction fees to move nothing, and stablecoin issuer Paxos mistakenly minted $300 trillion PYUSD tokens.
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