Cardano Inventor Front-Ran SundaeSwap Users? Research Casts Light

Reynaldo Marquez

3 years ago

3 mins read

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Over the weekend, a Reddit post accusing Charles Hoskinson, inventor of Cardano of front-running 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.

Related Reading | Cardano Price Up And Down Amidst SundaeSwap Launch

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 were 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 viewed 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, a 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.

As of press time, ADA trades at $0.93 with a 9.2% profit in the last 24 hours. The 9^th 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.

ADA Cardano ADAUSDT — ADA with moderate profits on the daily chart. Source: ADAUSDT Tradingview

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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