In the wild west of cryptocurrency, the unexpected can lead to catastrophic mistakes. Case in point, a recent incident where a lonely investor made headlines not for swimming in profits, but for drowning in losses—specifically, a staggering $2 million.
The Great USDC Sell-Off
As if the world needed more financial mayhem, Circle dropped the bombshell that a whopping $3.3 billion of its USD Coin (USDC) reserves was snagged by Silicon Valley Bank. Unsurprisingly, the market freaked out quicker than a squirrel in traffic, resulting in a massive sell-off and USDC’s plummet away from its comfy $1 peg.
The Tragic Tale of a $2 Million Mistake
Amid this chaos, our hero—or perhaps victim—decided to cut losses by trading his USDC for other stablecoins, particularly Tether (USDT). However, instead of easing into safety, they took a shortcut that would later be regarded as borderline tragic. One noteworthy transaction revealed that this investor paid an eye-watering $2,080,468.85 to receive a staggering grand total of… $0.05 USDT. Yes, you read that right.
How Did This Happen?
On-chain sleuths uncovered that our intrepid investor had a stash of assets sitting in a liquidity pool (LP), a way many crypto enthusiasts earn a passive income while pretending to understand the complexities of DeFi. Instead of cashing out smartly, our investor bypassed the security of a 6% slippage option for a rather dubious route. BowTiedPickle on Crypto Twitter put it best:
“The unfortunate soul used the KyberSwap aggregation router to dump a large clip of 3CRV (DAI/USDC/USDT) LP token into USDT.”
The Human Factor
In a rush reminiscent of a last-minute holiday shopping spree, our victim forgot to set their slippage, a crucial detail that allows traders to specify the token price for transactions. With the urgency of a cat on a hot tin roof, the oversight led to a maximal extractable value (MEV) bot raking in a cool $2.045 million—after spending just $45 on gas and throwing in $39,000 in MEV bribes. Ouch!
Lessons Learned: Double-Check, Please!
So, what can we take away from this tech tragedy? First, make sure your slippage settings are in order before clicking that high-stakes button. Secondly, and perhaps most importantly, recheck all transfer methods and information before diving headfirst into transactions.
Current State of USDC
With the latest drama unfolding, USDC has seen better days, dropping over 10% of its value and trading at around $0.8774. To add to the tumult, Circle confirmed that a significant chunk of their reserves remain filched by the uneven hands of fate. Folks, when investing in cryptocurrency, being well-informed is your best friend, and this tale serves as a cautionary reminder for us all to approach the crypto waters with at least a little bit of trepidation.
+ There are no comments
Add yours