On November 17, 2025, the Cardano community witnessed a stark and costly reminder of the risks inherent in decentralized finance. A long-term holder, often referred to as a ‘whale’, saw a routine attempt to swap a large amount of ADA for a stablecoin turn into a catastrophic loss of approximately $6 million in a matter of seconds.
The incident occurred on Minswap, a decentralized exchange on the Cardano blockchain. The user, whose wallet had been dormant for over five years, attempted to swap 14.4 million ADA, then worth about $6.9 million, for USDA, a Cardano-native stablecoin designed to be pegged to the U.S. dollar. However, the chosen ADA/USDA trading pool had a critically low level of liquidity, with a total depth of only around $1.9 million—far too shallow to absorb such a massive trade without a dramatic price impact.
A Costly Click: How the Loss Unfolded
The mechanics of the trade were as brutal as they were swift. When the large ADA sell order hit the illiquid pool, the automated market maker (AMM) protocol executed the swap at an exponentially worsening rate. The whale received only 847,695 USDA in return, worth about $847,000, effectively valuing each USDA token at over $8 instead of its intended $1 peg. This resulted in a direct financial loss of roughly $6.05 million.
The trade was so large relative to the pool that it caused the stablecoin to temporarily depeg, with its price spiking as high as $1.26 on some data feeds before arbitrage traders stepped in to restore balance. Adding a layer of tragedy, on-chain data shows the user performed a small test transaction of 4,437 ADA just 33 seconds before the main swap, suggesting an attempt at caution that ultimately proved insufficient against the pool’s lack of depth.
The Deeper Lesson on liquidity
This event is a textbook example of a “liquidity trap” in DeFi. USDA is a relatively new stablecoin with a small market capitalization of around $10.6 million at the time. For a trade of this size, the available liquidity was simply inadequate. The massive sell order overwhelmed the pool, causing extreme slippage that vaporized the majority of the trade’s value.
While some in the community speculated about a possible “fat-finger” error or confusion with another stablecoin ticker, the core issue was a fundamental mismatch between the order size and the market’s capacity to fill it. The incident has sparked wider discussions about the need for better liquidity solutions and user education within the Cardano DeFi ecosystem.
For traders, this serves as a critical lesson: always verify the liquidity depth of a trading pool before executing a large swap. It is often safer to break large orders into smaller chunks, use decentralized exchanges with robust liquidity, or route trades through more established pools to avoid such devastating outcomes.
