TL;DR
- Paradex refunded $650,000 to 200 users after a maintenance-related error triggered unintended liquidations.
- The platform temporarily disabled access, canceled open orders except take-profit and stop-loss, and performed a rollback.
- Following the incident, the platform updated and restarted its services.
Paradex refunded approximately $650,000 to around 200 users after a maintenance-related software error triggered unintended liquidations across multiple markets. The incident occurred during a planned 30-minute database upgrade. A “race condition” caused corrupted market data to be written onchain, affecting users’ leveraged positions. The company clarified that this was not a hack or security breach.
To contain the impact, Paradex temporarily disabled access to the platform, canceled all open orders except take-profit and stop-loss orders, and rolled back the chain to a snapshot taken prior to the maintenance. The company described the action as necessary to protect users and restore network integrity.
Measures Implemented by Paradex
Paradex implemented preventive measures after the incident, including updated service restart procedures, additional data validation checks, a revised scale-up process for full-downtime maintenance windows, and price-band protections during post-only trading periods. The company noted that this was the first rollback in the platform’s history.
The error highlighted how operational and infrastructure failures can affect derivatives trading, even in the absence of external attacks. In October, decentralized exchange dYdX paused operations for eight hours after code errors and delayed oracle restarts caused mispriced trades and liquidations, compensating affected traders with $462,000 from its insurance fund.
In November, the Chicago Mercantile Exchange halted trading for roughly 10 hours after a failure at a CyrusOne data center disrupted operations, causing interruptions for traders. Cloudflare also reported service degradation in November that affected access to front ends of platforms including Coinbase, Blockchain.com, BitMEX, Ledger, and DeFiLlama.
Paradex allows users to take leveraged positions in derivatives without depositing funds in a centralized exchange, maintaining control of their assets. Onchain protocols must implement risk mitigation measures and reliable maintenance and data protection systems. The platform will continue providing refunds and adjustments when technical failures affect users, prioritizing network integrity, user trust, and market continuity
