Paradex, a decentralized exchange, recently experienced a major problem. A data error caused the price of Bitcoin (BTC) to drop to zero on the platform, leading to many forced liquidations and a temporary shutdown.
After being offline for several hours, Paradex resumed operations and assured users that their funds were safe. The exchange also acknowledged the seriousness of the incident.
Data Error Triggers Bitcoin Price Glitch on Paradex
The incident began after Paradex carried out a database migration. During the process, wrong data was entered into the system and caused Bitcoin’s price to be shown incorrectly.
The platform recorded Bitcoin at zero, which quickly triggered mass liquidations on open trades. To fix the problem, the Starknet-based exchange rolled the system back to how it was before the migration.
This action removed the incorrect data and aimed to restore normal market conditions. For context, a rollback resets a blockchain application to an earlier state in order to undo faulty data or transactions after a technical failure.
Teams usually use this step as an emergency action to fix the system and keep user funds safe. As part of the recovery, the platform cancelled all open orders except take-profit and stop-loss orders.
Paradex Restarts After Long Outage, Market Reacts
Paradex later told users that all customer funds were safe. The exchange said the recovery took time because the system was complex. For that reason, the team could not provide a confirmed timeline for full resolution at the time of the update.
After roughly eight hours offline, Paradex eventually resumed operations. The exchange had recorded around $37 billion in trading volume over the previous 30 days.
This outage was a major problem for active traders and liquidity providers. It showed the special risks of decentralized exchanges, which depend heavily on complex technology and have no traditional regulators.
Mistakes in databases, smart contracts, or blockchain connections can quickly stop trading and reduce liquidity. After the data error, Starknet’s STRK token dropped by 3% to 6%, showing wider market worries about the stability of related apps.
Paradex Faces Another Major Challenge After Past Crises
This latest setback added to a difficult period for Paradex. The exchange already carried scars from the collapse of FTX, during which its team suffered heavy losses.
Paradex emerged from the liquidity network, Paradigm, one of the most influential investment firms in crypto and AI. Earlier, in September, Paradex faced another major disruption when a bot attack overwhelmed legacy systems tied to account creation.
That event caused long delays and forced the cancellation of many orders, further testing user confidence.