Paradex moves on from chain rollback triggered by maintenance bug with $650K refund

Paradex refunded $650,000 to about 200 users after a planned 30-minute maintenance upgrade on January 19, triggering unexpected liquidations across multiple markets on Paradex Chain. 

The platform shared a post-mortem on X on January 23 stating that the incident happened when an unexpected scale-up error reset funding indices to zero, distorting funding P&L and forcing liquidations during the brief maintenance window. Paradex confirmed that the issue was operational, not the result of a hack or security breach.

Paradex is an on-chain derivatives platform that allows traders to take leveraged, permanent bets while maintaining control over their money, rather than depositing assets with a centralized exchange.

Paradex implements rollback after database upgrade malfunction

Paradex said that a complete rollback to a healthy pre-maintenance condition was necessary due to the extent of the interruption across several users and marketplaces, making targeted solutions impractical. 

The platform briefly blocked access and initiated rollback procedures to restore the chain to a snapshot taken before the upgrade began. To ensure a controlled recovery, it canceled all open orders except take-profit and stop-loss orders. The platform further revealed that during a brief post-only period, a few users were impacted by aggressive trades that skewed prices and led to additional liquidations, mostly in PAXG.

In response to impacted users, the platform stated that it had refunded $650,000 to 200 accounts from the Liquidator Vault after auditing every account affected by improper liquidations (as well as other lingering issues). It further revealed that by Monday, January 26, all remaining data inconsistency concerns on the Portfolio and Vault pages should be fixed.

Following the incident, Paradex said it implemented enhanced service restart procedures and additional data validation safeguards. The platform went on to say that it implemented a revised scale-up process for full-downtime maintenance periods. It also rolled out post-only period price band protection.  

The exchange further said that the changes it introduced since then strengthen its ability to operate safely as the system scales.

Paradex, however, acknowledged the incident as its first chain rollback, describing it as “an undesired but necessary action to protect users and restore network integrity.” 

Infrastructure failures expose fragility across global trading platforms

Recent incidents demonstrate how access to the cryptocurrency market and futures trading can be hampered by operational and infrastructure issues rather than hacking.

On October 10 of last year, the decentralized exchange dYdX suspended trading for around eight hours due to mispriced trades and liquidations caused by a code-ordering issue and delayed oracle restarts.  Cryptopolitan reported that the exchange proposed a governance vote to compensate impacted traders with up to $462,000 from the protocol’s insurance fund.

Apart from dYdX, this incident put Binance’s trading services under pressure due to significant price fluctuations, user complaints, and regulatory attention. Traders expressed their displeasure with Binance due to technical issues that prevented them from completing their holdings. This entailed the depeg of Ethena’s USDe synthetic stablecoin and UI issues that showed several tokens with prices below zero.

Following the outage, sources reported that Binance did not take responsibility for traders’ losses. Nonetheless, the crypto exchange launched a $400 million assistance program for affected individuals. The project included $100 million for affected industry participants and $300 million in token vouchers.

Technical issues have also affected traditional derivatives markets. In November of 2025, the Chicago Mercantile Exchange (CME) suspended trading for almost ten hours due to a cooling failure at a CyrusOne data center in Illinois following concerns from traders.

In the same month, Cloudflare, a provider of internet infrastructure, announced a “internal service degradation.” Users were temporarily unable to access exchanges, wallets, and data dashboards due to a problem affecting the front ends of numerous major cryptocurrency platforms.

The downtime affected crypto firms such as Coinbase, Blockchain.com, BitMEX, Ledger, and DefiLlama.

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