In brief
- A database migration issue on perps decentralized exchange Paradex led to the price of Bitcoin showing as $0, forcing a liquidation cascade.
- The issue required a chain rollback to revert to its last normal state before the glitch took effect.
- Service has since been restored and user funds are safe, according to the exchange’s status page.
The price of Bitcoin dropped to $0 on perps decentralized exchange Paradex overnight, according to numerous users, after a database migration issue affected the Paradex blockchain, its block explorer, bridge, and API.
An issue was first flagged on the Paradex status page at 12:36 a.m, ET on Monday, shortly after social media posts flagged a cascade of liquidations as the price of Bitcoin plunged to $0 on the exchange.
Around 2:00 a.m. ET, the exchange identified the issue and began instituting a fix that resulted in rolling back the state of Paradex Chain, a blockchain built using the Starknet stack. Starknet is an Ethereum layer-2 scaling network.
“We have identified the issue and will be rolling back chain state to block 1604710,” the status update reads. “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. We will provide more updates as we continue with rollback.”
Shortly thereafter, Paradex force-cancelled all remaining open orders, and around 5:00 a.m. ET it confirmed that all user funds were safe as its recovery process was ongoing.
“Recovery efforts are ongoing. We can confirm that all user funds are SAFU,” a post on the status page at 5:16 a.m. ET reads.
It’s still unclear how much the liquidations tallied up to, but data from DeFiLlama indicates that the perps protocol has around $641 million in open interest. The protocol has facilitated around $37 billion in volume over the last 30 days.
All Paradex services are now operational, according to an update on the status page.
The exchange’s price glitch followed a volatile period of trading for BTC, which dropped from more than $95,000 to $92,284 just after 7:00 p.m. on Sunday. The 2% drop in the last 24 hours has eaten into the top crypto asset’s weekly gain, which now stands at 1.4% with BTC recently changing hands at $93,318.
The slide triggered a growing number of liquidations, which have now extended to more than $875 million over the last 24 hours—$234 million of which can be attributed to Bitcoin, according to data from CoinGlass.
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