A long-dormant wallet on the Cardano blockchain suddenly sprang to life—and within minutes, nearly $6 million was gone. The wallet, inactive since 2020, executed a swap involving 14.4 million ADA (worth approximately $6.9 million at the time) in exchange for USDA, a relatively small dollar-pegged stablecoin. But instead of receiving an equivalent value in stablecoins, the trader ended up with just 847,695 USDA—losing over 90% of their funds. Slippage in a Shallow Pool The root cause was slippage: a phenomenon where the execution price of a trade diverges sharply from its expected value, especially in low-liquidity environments. In this case, the swap was routed through a decentralized exchange pool that lacked the depth to absorb such a large ADA order. As the trade progressed, the price of USDA spiked to $1.26 before collapsing, skewing the swap rate dramatically against the trader. Unlike centralized platforms, DEXs don’t prevent users from making economically irrational trades. The mechanism executed exactly as programmed—no intervention, no second chances. While the DEX interface may have displayed a warning, it’s unclear whether the user noticed or understood it. A Trader’s Possible Mistake Some speculate that the wallet’s owner may have confused USDA with another stablecoin or failed to grasp the risks of executing a massive order in a thin pool. The similarity in token tickers or the assumption that all dollar-pegged tokens are equally liquid could have contributed to the error. Observers noted that the wallet had no prior interactions with USDA, and its sudden activity after five years raised questions about whether the user understood the platform’s risks or liquidity conditions. Hard Lessons in DeFi This incident is a stark reminder that trading on decentralized platforms carries unique risks—especially for large holders. Slippage, token selection, and liquidity must be carefully analyzed before moving significant amounts. On-chain systems offer transparency and control, but they don’t forgive mistakes. For Cardano and the broader DeFi space, the message is clear: even on mature chains, economic risk remains if users aren’t vigilant. One misconfigured or poorly timed trade can wipe out millions in seconds. Negative Spotlight on Cardano The media is calling this the biggest DeFi mistake of 2025. It wasn’t a hack, a bug, or a failure of technology—it was a liquidity failure. And that’s a serious problem for Cardano. Cardano may have superior technology, but if its ecosystem lacks liquidity, it will struggle to achieve widespread adoption. Success in blockchain is no longer just about technical excellence—it’s also about economic competitiveness. And in this regard, Cardano is falling behind. Where Is the Liquidity? The Treasury has been handed over to the community—specifically, to DReps. Treasury Withdrawal, which wants to use 50M ADA to inject liquidity into the ecosystem, has not yet been submitted. The team is likely adjusting the proposal based on feedback from Info Action. Meanwhile, founding entities like EMURGO and the Cardano Foundation hold large ADA reserves. The Foundation even pledged an eight-figure sum to mint stablecoins, but has failed to inject meaningful liquidity into the ecosystem throughout the year. We can only hope the bull market isn’t over and that stablecoins can still be minted at favorable rates. Whether 10 million ADA mints 5 million, 10 million, or 15 million USD makes a big difference. But even 100 million USD in liquidity would be modest compared to competing ecosystems. The Challenge Ahead Cardano urgently needs liquidity in the range of hundreds of millions of USD—not just tens of millions. If the market turns bearish and the ADA-to-USD rate drops, minting even $100 million worth of stablecoins could become a serious challenge. Looking ahead, if the Net-Change Limit for the next funding period is set at 300–400 million ADA, and more than half of that is allocated to IOG and other projects, there may be very little left to support stablecoin liquidity. That’s a problem. It’s becoming clear that relying solely on Treasury allocations may not be enough. We need to explore alternative strategies or new directions to inject meaningful liquidity into the Cardano ecosystem.
