On-chain derivatives platform Paradex has refunded approximately 200 users $650,000 after a maintenance-related software error caused unintended liquidations in multiple markets.
According to a post-mortem shared by Paradex on X on Friday, the incident occurred during a scheduled 30-minute database upgrade on Monday, when a “race condition” caused corrupted market data to be written on-chain. Paradex said the issue was an operational issue and not the result of a hack or security breach.
In response, 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 before the maintenance period began.
sauce: paradox
Paradex is an on-chain derivatives platform that allows traders to take permanent leveraged positions while managing their funds rather than storing them on a centralized exchange.
The incident marked the first rollback for Paradex Chain, which the exchange described as an “undesirable but necessary measure to protect our users and restore the integrity of our network.”
Paradex said it has implemented changes to prevent a recurrence, including updating its service restart procedures, adding data validation checks, revising its scale-up process to accommodate a full downtime maintenance window, and protecting its price range during post-only trading periods.
Related: 80% of hacked crypto projects will never ‘fully recover’, experts warn
Transaction interruption due to technical failure
Recent incidents highlight how operational or infrastructure failures, rather than hacks, can disrupt derivatives trading and access to crypto markets.
In October, decentralized exchange dYdX suspended trading for approximately eight hours due to code order errors that delayed oracle restarts, resulting in incorrectly priced trades and liquidations. The exchange proposed a governance vote to compensate affected traders up to $462,000 from the protocol’s insurance fund.
Technological disruption is also impacting traditional derivatives markets. In November, the Chicago Mercantile Exchange (CME) halted trading for about 10 hours after a cooling failure at its CyrusOne data center in Illinois disrupted operations and prompted complaints from traders.
sauce: CME Group
Internet infrastructure provider Cloudflare reported “degradation of internal services” in November. The issue disrupted access to the front ends of several major cryptocurrency platforms, leaving users temporarily unable to access exchanges, wallets, and data dashboards.
The outage affected cryptocurrency companies such as Coinbase, Blockchain.com, BitMEX, Ledger, and DefiLlama.
magazine: A “tsunami” of wealth is headed towards cryptocurrencies: Nansen’s Alex Svanevik
