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Businesses The Almighty Buck

Trader Loses $5.7 Million To Slippage in Memecoin Trade 54

Web3 is Going Great: A trader looking to buy $9 million of a recently popular Solana memecoin, dogwifhat (WIF), lost $5.7 million of their funds to slippage as they placed a massive order in a pool with relatively low liquidity. $5.7 million of their funds were lost to "slippage" -- the discrepancy in price that can occur when a trade is so large or a market is so illiquid that the trade itself impacts the asset price.
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Trader Loses $5.7 Million To Slippage in Memecoin Trade

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  • by 93 Escort Wagon ( 326346 ) on Monday January 15, 2024 @11:04AM (#64159963)

    Stupid person loses money!

    This is a developing story. Check back here for updates.

    • by brunes69 ( 86786 ) <slashdot@nOSpam.keirstead.org> on Monday January 15, 2024 @11:12AM (#64159991)

      The real story would be behind how someone so stupid got entrusted with $6 million dollars in the first place

      • The real story would be behind how someone so stupid got entrusted with $6 million dollars in the first place

        My guess is somebody's daddy.

      • You call him stupid but it is a beginners mistake (not to do with being stupid but not knowing or understanding how the market works or that he should test the liquidity with a series of trades at least.) He is now educated at high cost to himself. However one person's mistake is another persons gain. The slippage means that traders on the other side were filled with orders that were way out of the current market price.

        This guy probably made his money trading crypto and will probably make it back doing t
      • That's simple. Crypto valuations are almost entirely bullshit and based on pump & dump manipulations. While the notional value of the crypto was $7m, the actual liquidity you could extract was only $20k at best. All crypto is a scam.

    • by kmoser ( 1469707 )
      Cryptocurrency is unstable. Film at 11.
    • by Dusanyu ( 675778 )
      At this point I don't concider "Crypto Currancy" to have the same vallue as "Hell Bank Notes" https://en.wikipedia.org/wiki/... [wikipedia.org]. A bunch of nerds saying "This has value trust us bro" does not instill confadance Whaile U.S. Currancy is basicly the Government saying the same thing. There saying it, is atleast backed up with aircraft carriers and nukes.
      • You're right. Now, if these memecoins were at least liquid enough so you could trade them for a sufficient quantity of hell money, then at least you'd be ready for the afterlife! Still, I'm old fashioned even when it comes to graveyard economics. I prefer to get my hell fortune the tried-and-true Egyptian way. If you want to be the wealthiest man in Duat/Hades, you have to bury your servants and subordinates alive with you so they can continue to pamper you for all eternity! That's my plan, at least.
    • Stupid person loses money!

      This is a developing story. Check back here for updates.

      Little known fact: shortly after cracking the code on hieroglyphics, Egyptologists were eager to see what sorts of secrets were buried in the tombs of the kings, but try as they might, the message you provided above accounted for nearly all hieroglyphs (the handful of remaining messages translated to “drink your ovaltine”). Experts have been checking back regularly for updates ever since, and have sought additional funding to keep doing so.

    • Of course all money has this problem to some degree. We saw this coming out of Covid, big-time - if too many people try to spend their $USD at once, they lose value. The value of a dollar equals the number of dollars that people are willing to spend divided by the total value of the goods and services available.

      I'm not pointing that out as a crypto-apologist - more in response to the stories over the weekend that the average net worth of 50-somethings in the US has now surpassed $1M. [usatoday.com]

      So for all of us t

      • Average net worth doesn't mean much.

        Median net worth means far more, and it is much lower.

        The average household net worth in Boca Chica, Texas is $10 billion.

        • Average net worth doesn't mean much.

          That has become the kneejerk response to every article stating a mean, and it's not true. The mean does matter. Your dollars are competing in a market of other peoples' dollars, whether that's a lot of people with a few dollars each, or a few people with many dollars each.

          Look at cars, as we've seen the automakers stop production of lower margin cars since there's a better profit making fewer more expensive ones, and this in turn propagates downwards and runs up the

  • by RemindMeLater ( 7146661 ) on Monday January 15, 2024 @11:04AM (#64159965)
    Most brokerages won't let you buy penny stocks without setting a limit price for this very reason. Hard to imagine someone so naive as to place a massive order like this without considering the impact of slippage.
    • Re:Limit price? (Score:4, Interesting)

      by XXongo ( 3986865 ) on Monday January 15, 2024 @11:19AM (#64160029) Homepage

      Most brokerages won't let you buy penny stocks without setting a limit price for this very reason.

      Yeah, cryptocurrency purchases are entirely unregulated, and "brokerages" are amateurs. The whole point of the idea was to get rid of the "gatekeepers." Well... the gatekeepers are gond.

      Hard to imagine someone so naive as to place a massive order like this without considering the impact of slippage.

      I doubt that the buyer even heard of "slippage". Cryptocurrency trading is mostly done by amateurs who think they can get rich quick on stuff that the professionals stay clear of.

      • The stupid amateur had $9M to waste on this. There's no way a "trader" with $9M to spend on a single gambling coin doesn't know slippage. This can't be an amateur trying a quick get rich scheme, who just so happened to have $9M to start with. I think the more likely scenario is what CrappySnackPlane had below, a money launderer that needed to hide $9M fast.
        • by mbkennel ( 97636 )

          most likely a fat finger error, or miscomputation which can be easy with weird 10^-7 based prices.

          for money laundering there are better options.

        • by XXongo ( 3986865 )

          The stupid amateur had $9M to waste on this.

          In the world of high-stakes trading that's peanuts.

          Guy was an amateur who thought he could play with the big boys.

      • I doubt that the buyer even heard of "slippage".

        There's no way that a complicated thing I don't understand could possibly come back to hurt me!

    • by penguinoid ( 724646 ) on Monday January 15, 2024 @11:42AM (#64160103) Homepage Journal

      Hard to imagine someone so naive

      I've got bad news for you, but you're going to want to sit down for this, in front of a mirror...

  • by CrappySnackPlane ( 7852536 ) on Monday January 15, 2024 @11:12AM (#64159993)

    "Would-be money launderer loses $5.7 million worth of gift cards to slippage"

  • Woops (Score:4, Insightful)

    by DrMrLordX ( 559371 ) on Monday January 15, 2024 @11:13AM (#64159995)

    Most swap contracts let you specify maximum slippage. Uniswap certainly does.

    Also that's what you get for trying to buy some idiotic memecoin that isn't even on a CEX.

  • by Morpeth ( 577066 ) on Monday January 15, 2024 @11:24AM (#64160045)

    Random silly person no one has heard of loses money on random coin that no one has heard of. Seriously this is news that matters how?

    C'mon /. you can do better... we need CmdrTaco (I know the ship sailed ages ago...)

    • by DrMrLordX ( 559371 ) on Monday January 15, 2024 @01:50PM (#64160431)

      It's not losing money on the coin. It's the slippage.

      https://help.coinbase.com/en/c... [coinbase.com]

      Slippage is pretty easy to avoid on a CEX, such as Coinbase (linked above). Set a buy order at a fixed price and wait for people to fulfill that buy instead of attempting a market buy. Even if you DO execute a market buy, the CEX is usually nice enough to prevent frontrunners from seeing your trade request and shifting open sell orders around to screw you.

      When using a swap contract, frontrunners can and will wreck you. Which is why you have to set a slippage limit to prevent that. Sadly the aforementioned idiot with $9 million seemed to have either a). not understood what slippage limits can do to prevent problems such as this or b). engaged with a smart contract that doesn't allow slippage limits.

      Anyway, the point of the story is: slippage. On DeFi swap contracts, people get burned this way a lot. So much so that frontrunner bots plague swap contract.

  • This guy was over greedy, and he overestimated the amount of money that he could make. So he went all in because he was an idiot. Then the market was not big enough so he lost most of it.

    Big fish tried to be the biggest fish in the pool and the pool was too small to let him breath. What an idiot.

    I would absolutely love to know how he got trusted with the money, because I could double that money, in a much safer way, with a clear audit trail while not violating regulations or doing risky junk.

  • This does not add up (Score:4, Interesting)

    by CEC-P ( 10248912 ) on Monday January 15, 2024 @11:39AM (#64160093)
    That's not how any of this should have worked and the real article starts with "Some market watchers have termed the trade a possible “marketing stunt,” one that could have drawn attention to WIF as prices took a hit in recent weeks."
    You'd smash all buy walls and then the resulting price hike on manual trades from people getting alerts would crash the price but not nearly to that volume. The guy's either an idiot or this is a "long game" headline bait scam. I've been in crypto since 2010 and even I'm not sure which but this is another meme-based Solana chain shitcoin so nobody with a functioning brain would dump this kind of money into it without a reason. I'm definitely leaning towards scam.
    • Re: (Score:3, Insightful)

      by iggymanz ( 596061 )

      or you can't accept the fact that blockchain is absolutely the worst distributed database solution devised by the mind of man and even makes bitcoin illiquid at times.

      but then they're all a shitcoin, a gambling token that nobody with a function brain would dump money into

      • by CEC-P ( 10248912 )
        You know that nothing in this article has anything to do with blockchain tech, right? The way they're presenting it, any security or stock or currency exchange would have allegedly done this. They're lying, of course, but still.
    • A "marketing stunt"? Yeah nothing says marketing more than "Hey everyone, look how much of a joke we are, you can't even conduct a transaction without losing money!"

      Anyone who said there's no such thing as bad publicity needs to go get their money back from whomever lobotomised them.

  • Film at 11.

    Or on Netflix, it wouldn't be the first hyped up crap nobody really gives a fuck about that they make a whole series out of.

  • by Anonymous Coward

    Why is it that stupid people have so much money? What the actual fuck.

    Does being stupid make you rich? Ignorance is wealth?

    • The single greatest indicator that you will be wealthy, the greatest common attribute of wealthy people, is that their parents were wealthy, not intelligent. Money makes money, money creates connections that help you make more money.

  • Source? (Score:5, Interesting)

    by sacrilicious ( 316896 ) <qbgfynfu.opt@recursor.net> on Monday January 15, 2024 @11:58AM (#64160139) Homepage
    The link given here on slashdot goes to a non-official-looking blog-style blurb, which links to some news outfit I've never heard of, which links to Twitter, which links to some other place that wanted me to log in and I got bored and stopped clicking. At this point I'm not convinced the alleged trade actually occurred. If it can be shown to have occurred on a less-than-multiple-click chase from the slashdot starting point, maybe that's on me; but otherwise, I'll say that I like to see better standards of presentation.
  • What stupid fuck doesn't understand the difference between a market and a limit order, and what stupid fuck places a huge buy order in an illiquid market using the former?

  • This could have happened on the stock market as well. If you pick a stock that doesn't have many trades, then trying to buy 9 million dollars worth of stock will make the price go up. If the stock has recently dropped say from $15 to $10, there will be lots of sell orders for $15 still in the system, that nobody bothered deleting. So once the available shares are gone, your 9 million dollar order will gobble all these large orders up. And when people notice, lots who were happily holding the stock will put
    • by iwrks ( 6306230 )
      Which is why you place limits on orders. Also, for stock orders, there is normally have a window of time that they are active for. To help prevent this kind of thing...
  • by hdyoung ( 5182939 ) on Monday January 15, 2024 @12:26PM (#64160197)
    6 million actual USD or 6 million “dollars of crypto” which in reality is worth exactly “who the f&*k knows but pennies on the dollar at most”. If the transaction actually happened at all. This is the internet, after all.
  • This is just an attempt to hype up the particular cryptocurrency.

    If you look up the link and follow it through you'll note that it's only the crypto-journals and social media repeating the same story.
    If you look it up on news search sites (groundnews, google news, etc.) you'll find no "real news" source even mentioning it.
    You will however find a lot of "trader turned $1xx K into $2-5M in a week buying (same crypto).

    Not really slashdot material any more than yesterday when I dropped a quarter down the drain.

  • he'll lose to fraud.
  • Apparently not this nil wit.

  • Fuck him
  • But at least he now has the dogwifhat currency he needed to purchase from stores that only accept WIF, so what's the big issue?

  • "Do women know about slippage?"

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