Paradex refunds $650K to 200 users after maintenance bug triggers liquidations

Onchain derivatives platform Paradex just dropped $650K back to ~200 users after a maintenance bug went rogue and triggered mass liquidations. This wasn't a hack — just a classic case of software going haywire during a planned database upgrade.

According to their Friday post-mortem on X, a 'race condition' during a 30-minute upgrade corrupted market data onchain. Paradex had to pull the emergency brake: disabled platform access, canceled open orders (except TP/SL), and rolled back the chain to a pre-maintenance snapshot. This was the first-ever rollback of Paradex Chain — 'undesired but necessary' to protect users.

Paradex is an onchain derivatives platform where traders keep control of their funds while taking leveraged perpetual positions — no centralized exchange custody required. After this mess, they've implemented new safeguards: updated service restart procedures, extra data validation checks, revised scale-up processes for maintenance windows, and price-band protections during post-only trading.

This isn't an isolated incident. Tech failures are increasingly the real villains in trading disruptions, not just hacks.

In October, dYdX paused trading for ~8 hours after a code-ordering error and delayed oracle restarts led to mispriced trades and liquidations. They're now voting on compensating traders with up to $462K from their insurance fund.

Even traditional markets aren't immune. In November, the Chicago Mercantile Exchange (CME) halted trading for ~10 hours after a cooling failure at an Illinois data center disrupted operations — traders were not happy.

Internet infrastructure provider Cloudflare also had an 'internal service degradation' in November, briefly taking down front ends of major crypto platforms like Coinbase, Blockchain.com, BitMEX, Ledger, and DefiLlama. When Cloudflare sneezes, crypto catches a cold.