Over the weekend, a Reddit post accusing Charles Hoskinson, inventor of Cardano of frontrunning SundaeSwap users went viral. A pseudonym user said Hoskinson used a large amount of ADA to benefit from a price hike on the decentralized exchange native token, SUNDAE.
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As one of the first DEX running on Cardano, there is a lot of hype around SundaeSwap. The ADA whale, according to the user, used his funds to queue jump other users and be one of the first to benefit from SUNDAE’s launch.
The pseudonym user based the accusations on three alleged facts: a large SUNDAE order was placed before the DEX was deployed, a wallet with millions of ADA was created specifically for this event, the funds can be tracked to another wallet with “a billion of unstaked ADA” or an entity sitting at the top of the Cardano rich list.
The pseudonym user claims the large transactions was linked to the inventor of Cardano after “about an hour clicking CardanoScan links”. The user provided a link of addresses related to his claims which can be view in the following link.
In addition, the pseudonym user addressed the possibility of a crypto exchange or similar entity involved with the transaction rather than Charles Hoskinson by saying:
I do not think any of the addresses in the chain of CardanoScan links below are exchange wallets. You can take a look through them and try to identify which you think is an exchange, but it looks to me they are regular wallets. Most of the addresses in the sequence have just a single input and single output, so it was easy to trace.
Since IOHK, the company responsible for developing Cardano, was a key player on many of the projects or components on this network’s ecosystem, seems logical a large portion of ADA is linked back to them. However, the pseudonym user seems to believe that an important portion of the ADA supply in circulation can’t be linked to IOHK.
Inventor Of Cardano Replies To Accusations
The inventor of Cardano, Charles Hoskinson, replied to the accusations and to the Reddit post. Via his Twitter account, Hoskinson said:
Had a look at the sundae Reddit posts that have been cropping up. It looks like the funds came from a Coinbase custody account that aggregates thousands of users.
Later, Hoskinson shared a link to a full investigation conducted by Colin Edwards, a Quantitative Strategist at IOHK. Therein, he explains Cardano’s UTXO model and by using on-chain analysis tracks down the SundaeSwap frontrunner.
Edwards posted the transactions that “jumped the queue” and the tools he employed to conduct his investigation. Ultimately, he concluded that a wealthy client probably using Coinbase Custody was behind the transactions. IOHK’s Quant said a subpoena, product of a legal procedure, could identify the actor. He added:
(…) practically all Ada is within 3 transactions of being on an exchange where it would have mixed with funds originating from IOHK. Having funds originating from IOHK deposited at a large custody company, along with funds from thousands of others, is a statistical certainty – not a smoking gun.
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As of press time, ADA trades at $0.93 with a 9.2% profit in the last 24 hours. The 9th crypto by market cap seems to be following the general sentiment in the market as it bounces back from the lows amid Russia’s invasion of Ukraine.