I invested a certain amount of btc in DADICE at a kelly of 10, as far as I know this means I can only lose 10% of my profit in 1 bet.
[...]
Then someone made 1 bet : #407989150
and my investment went immediately down by 29%
The 'effective bankroll' (ie. actual investments times Kelly multiplier) was over 1000 BTC at the time. That means the maximum profit per bet should have been over 10 BTC. So when someone wins 20 BTC because the site is risking too much, it's not more than double the correct amount to be risking.
The most you should have been able to lose is 10% of your investment per roll.
Even taking this fixed 20 BTC maximum profit into account, the most you should have been able to lose is ~20% of your investment per roll.
So how on earth did you end up losing 29%?
It seems there's more than one bug here.
It will be interesting to hear DaDice staff try to explain their way out of this major fuckup.