Paradex has reimbursed around 200 traders a total of $650,000 after a technical issue during system maintenance led to unexpected liquidations.
The team said the event was caused by a software error, not a hack or security problem.
In a post on X, Paradex explained that the incident happened on January 19 during a scheduled 30-minute database upgrade. A “race condition” occurred during the process.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What is Terra Luna? History & Crash Explained (ANIMATED)
When this happened, several markets were affected, and traders saw positions closed by mistake.
Once the problem was found, Paradex shut down the platform to prevent further damage. All open orders were canceled, except for take-profit and stop-loss orders, and the network was restored to a snapshot created before maintenance began.
Paradex runs as an on-chain derivatives exchange, which allows users to trade leveraged perpetual contracts without giving up control of their funds to a centralized platform. Because all trading activity occurs on-chain, a rollback was needed to correct the network’s recorded state.
This was the first time Paradex had to perform a chain rollback. The team described it as an “undesired but necessary action” to protect users and restore normal operations.
After the event, Paradex improved service restart procedures, added additional data checks, enhanced handling of full maintenance windows, and implemented price protection rules during post-only trading phases.
Saga, a blockchain network, recently temporarily shut down operations on its SagaEVM mainnet after discovering an exploit. How did the incident occur? Read the full story.