Paradex glitch sends BTC price to $0 on exchange, triggers mass liquidations
A database migration error on decentralized derivatives exchange Paradex briefly pushed its BTC perpetual price to $0 overnight, sparking a wave of liquidations and a frantic recovery effort.
Timeline and cause
- The problem first appeared on Paradex’s status page at 12:36 a.m. ET Monday, shortly after traders began posting screenshots and videos of Bitcoin’s price collapsing to $0 on the perps market.
- Around 2:00 a.m. ET Paradex confirmed the issue and began rolling out a fix that involved reverting chain state on Paradex Chain — a blockchain built on the Starknet stack (an Ethereum layer-2 scaling solution).
- Paradex said it would “be rolling back chain state to block 1604710. This is the time before the DB maintenance and is the last known correct state. All accounts will be restored to the state before the DB maintenance.”
Impact on users and markets
- The UI and market feed briefly showed BTC at $0, which one trader initially thought was a display bug but later reported the price returning and “thousands of liquidations” taking place.
- Paradex force-cancelled all remaining open orders during the recovery and later reported that “Recovery efforts are ongoing. We can confirm that all user funds are SAFU,” in a status update at 5:16 a.m. ET.
- It’s not yet clear how much of the liquidation damage occurred specifically on Paradex. On-chain data provider DeFiLlama shows Paradex’s perps protocol carries about $641 million in open interest and has handled roughly $37 billion in volume over the past 30 days.
- Broader market liquidations accelerated during the same volatile window: CoinGlass data shows over $875 million liquidated in the last 24 hours across derivatives markets, with roughly $234 million tied to Bitcoin.
Wider market context
- The Paradex outage came amid a choppy session for BTC, which dropped from above $95,000 to $92,284 just after 7:00 p.m. ET on Sunday. Bitcoin traded around $93,318 following the disturbance, a 2% move in 24 hours that trimmed its weekly gain to about 1.4%.
Status now
- Paradex says all services are operational as it continues its recovery and reconciliation process. The team has restored accounts to the last known correct state prior to the database maintenance, and users are being kept updated via the exchange status page.
Takeaway
- The incident underscores the operational risks that can follow backend maintenance on decentralized exchanges — even those built on L2 stacks like Starknet — and the speed with which margin positions can be liquidated when prices briefly mis-report. Paradex’s quick rollback and assurances that user funds are safe will be scrutinized as the platform completes its recovery and traders parse the fallout.
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