The post Cardano whale loses 90% ADA after conversion to an illiquid stablecoin appeared com. Key Takeaways Why did the whale lose $6M? The low liquidity triggered fluctuations and a subsequent devaluation of the swapped funds. What’s the status of Cardano DeFi? Besides a relatively low TVL, Cardano’s ecosystem is struggling with a limited stablecoin supply. A Cardano [ADA] whale got a painful lesson on trading on illiquid platforms over the weekend. The 5-year-old holder swapped 14. 4 million ADA tokens, worth $6. 9 million, for only 847, 695 USDA, a little-known USD-backed stablecoin by Anzens on the Cardano blockchain. That translated to a $6. 05 million loss or about 90% devaluation of his initially transferred ADA stash. According to renowned Web3 security analyst ZachXBT, the fluctuation was due to the stablecoin’s low liquidity. As of writing, he scooped Turtlecoin (TRTL) and other lesser-known coins. Cardano DeFi liquidity problem That said, the Anzens USDA had only $10 million in market cap, underscoring its liquidity risk, especially for large transactions. For a frictionless trading experience, the volume and liquidity of a platform, as well as its assets, are always crucial. Players can smoothly enter and exit positions without distorting the market or incurring losses in a more liquid venue. On centralized platforms, Binance, Coinbase, and others rank high in terms of liquidity, which attracts players with large orders. On on-chain platforms, DEXes across Ethereum [ETH], Hyperliquid [HYPE], Solana [SOL], and BNB Chain platforms have demonstrated significant liquidity depths, providing a smooth experience. But such depths are lacking across the Cardano ecosystem. Its low stablecoin supply is one of the telltale signs of Cardano’s DeFi inefficiency. It had only $38 million in stablecoin liquidity, mostly dominated by Moneta dollar (USDM) and Anzens USDA.