Cardano Inventor Front-Ran SundaeSwap Users? Research sheds light

A Reddit at the weekend after Charles Hoskinson, inventor of Cardano, accusing leading SundaeSwap users went viral. A pseudonymous user said Hoskinson used a large amount of ADA to take advantage of a price increase on the decentralized exchange native token, SUNDAE.

Related literature | Cardano price up and down amid SundaeSwap launch

As one of the first DEX to run on Cardano, there is a lot of hype surrounding SundaeSwap. According to the user, the ADA whale used its money to line up other users and be one of the first to take advantage of the launch of SUNDAE.

The pseudonymous user based the allegations on three alleged facts: a large SUNDAE order was placed before the DEX was deployed, a wallet containing millions of ADA was created especially for this event, the money can be tracked to another wallet with “a billion non- expanded ADA” or any entity that tops Cardano’s rich list.

The pseudonymous user claims the major transactions were linked to the inventor of Cardano after he “clicked on CardanoScan links for about an hour.” The user has provided a link to addresses related to his claims, which can be viewed below: clutch

Additionally, the pseudonymous user addressed the possibility of a crypto exchange or similar entity involved in the transaction rather than Charles Hoskinson saying:

I don’t think any of the addresses in the chain of CardanoScan links below are exchange wallets. You can look at them and try to identify what you think is an exchange, but it seems to me that they are regular wallets. Most addresses in the series have only a single entry and exit, so it was easy to trace.

Since IOHK, the company responsible for developing Cardano, was a major player in many of the projects or components of this network’s ecosystem, it makes sense that a large portion of ADA would be tied to it. However, the pseudonymous user seems to think that an important part of the ADA offer in circulation cannot be linked to IOHK.

Cardano inventor responds to accusations

Cardano’s inventor, Charles Hoskinson, responded to the allegations and to the Reddit post. Through his Twitter account, Hoskinson said

I’ve been looking at the sundae Reddit posts that have surfaced. It appears that the money comes from a Coinbase custodial account that collects thousands of users.

Later, Hoskinson shared a link to a full research conducted by Colin Edwards, a quantitative strategist at IOHK. In it, he explains Cardano’s UTXO model and uses on-chain analysis to track down the frontrunner of SundaeSwap.

Edwards posted the transactions that “jumped in the queue” and the tools he used to conduct his research. Ultimately, he concluded that a wealthy client likely using Coinbase Custody was behind the transactions. Quant of IOHK said a subpoena, a product of legal proceedings, could identify the actor. He added:

(…) virtually all Ada is within 3 trades of an exchange where it would have been mixed with money coming from IOHK. Money from IOHK deposited with a major custodian company, along with money from thousands of others, is a statistical certainty – not a smoking gun.

Related literature | Here’s What Cardano Founder Charles Hoskinson Wants For Christmas

At the time of writing, ADA is trading at $0.93 with a gain of 9.2% in the last 24 hours. The 9th crypto by market cap appears to be following general market sentiment as it bounces off the lows amid the Russian invasion of Ukraine.

ADA with moderate gains on the daily chart. Source: ADAUSDT Tradingview

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