5 years without movement, and suddenly a Rolls Royce is gone! I just came across a data point on the chain, and the actions of a large ADA holder made me cringe.
This person exchanged nearly 14.4 million ADA (worth about 6.9 million USD), which they had held for almost five years, all at once for the stablecoin USDA. The result? Because the liquidity of the funding pool used for the exchange was too shallow, this large transaction directly caused the price of USDA to skyrocket. In the end, this 6.9 million USD worth of ADA only returned 847,000 USDA, equivalent to a net loss of over 6 million USD.
The cost of liquidity exhaustion: this case could easily be written into a textbook. It brutally illustrates the risks of making large trades in a market with insufficient depth. You want to quickly sell a large amount of assets, but there simply isn't enough money in the market to absorb your sell orders, resulting in the price being crushed by your orders or exploding, causing massive slippage losses.
This incident serves as a wake-up call for all coin holders, especially those with large assets:
Check liquidity before trading: Whether it’s a treasure you've held for years or a new project you’re interested in, you must confirm the liquidity depth of the trading pair before making a large transaction. Don’t be afraid of the hassle; test the waters with a small amount first.
Be cautious with emerging ecosystems: Assets like the stablecoin USDA on Cardano are still in the early stages of development, and their liquidity cannot be compared to that of mature public chains like Ethereum. Participating in emerging ecosystems presents opportunities but also comes with such special risks.
In short, in the world of cryptocurrency, there are huge opportunities, but there are also deep and large pitfalls. A momentary negligence can lead to significant losses of years of savings. It’s always worth double-checking before executing.
I hope this large holder is okay...
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#CryptoMarketCorrection #TokenizationTrend #IsAltSeasonHere?
