Dormant Cardano Wallet Loses $6M in Swap

A Cardano wallet inactive for five years swapped 14.4 million ADA tokens worth $6.9 million for 847,000 USDA stablecoins on November 16, 2025, incurring a $6.05 million loss from extreme slippage in a low-liquidity decentralized exchange pool.

In the latest crypto market volatility, a long-dormant holder faced severe DeFi risks, trading ADA for USDA and sparking a brief price spike. This incident, flagged by investigator ZachXBT, underscores liquidity challenges on Cardano.

The Swap That Erased Millions

Onchain data reveals the wallet, dormant since around 2020, executed the trade on a Cardano-based DEX. The holder aimed to convert holdings into the USDA stablecoin, a fiat-backed asset launched earlier in 2025 for efficient payments within the ecosystem.

Liquidity in the ADA-USDA pool proved insufficient for the transaction's scale. Slippage reached 86.88%, meaning the effective exchange rate deviated sharply from market prices, resulting in the holder receiving far less USDA than anticipated.

The move triggered a temporary ADA price surge on the exchange, as the large sell order absorbed available buy-side liquidity. Blockchain explorer records confirm the address: addr1qy5lcrk497pg88xkfgwxp2v9y328g3j87tvq3sefpkmg7n7nst5js3fzwl4cm8g46fm6unayaet8yfcw5kp3jkjy0tdsr4x534.

DeFi Liquidity Traps Exposed

This event highlights persistent vulnerabilities in decentralized trading pools. Large orders in thin markets can cascade into unfavorable pricing, a risk amplified on emerging blockchains like Cardano where stablecoin adoption lags behind Ethereum or Solana.

USDA, developed by Anzens for cross-border use, entered trading on Minswap in March 2025 with initial pools valued at $4.35 million. Yet, by November, the pool's depth remained inadequate for multimillion-dollar volumes, echoing broader DeFi critiques on scalability.

Cardano's Stablecoin Growth Pains

Cardano's DeFi sector has expanded with tools like Minswap, but total value locked trails competitors at under $500 million. The USDA incident follows similar slippage reports in ADA pairs, prompting calls for deeper liquidity incentives from ecosystem developers.

Reactions from Investigators and Ecosystem Leads

ZachXBT, a prominent onchain sleuth, first detailed the trade's mechanics on X, noting the wallet's five-year inactivity and the "brutal" outcome. His analysis, shared via Onchain Lens, drew quick attention, amassing hundreds of views within hours.

Cardano founder Charles Hoskinson has not commented directly, but recent proposals from him advocate swapping up to $100 million in ADA for stablecoins like USDA to bolster DeFi liquidity. Input Output Global, Cardano's research arm, emphasizes ongoing upgrades to Ouroboros consensus for better transaction handling—details available on their official roadmap.

Broader Market Ripples

ADA traded at $0.48 post-incident, down 5.5% amid wider market pressures. The swap's visibility may accelerate liquidity injections; Minswap reports increased pool contributions in USDA-ADA pairs following similar past events.

As Cardano eyes Voltaire-era governance in late 2025, community votes could prioritize stablecoin infrastructure, per updates from the Cardano Foundation.

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