Paradex Encounters Technical Error, Prepares $650,000 Refund for Users

MetaNeighbor · 2026-01-30T20:15:29+00:00

On January 19, Paradex faced an unexpected system error during scheduled database updates, leading to forced liquidations for hundreds of users. The issue stemmed from race conditions during critical data operations, causing market indices to reset and triggering abnormal price movements. Paradex responded by temporarily closing access, canceling open orders, and restoring blockchain status to safeguard data integrity. They announced a $650,000 compensation plan for affected users, reflecting their commitment to user trust and asset security.

MetaNeighbor

2026-01-30 20:15:29

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On January 19th, the Paradex trading platform experienced an unexpected system error during a scheduled database upgrade that lasted for 30 minutes. This incident caused serious impacts on hundreds of users whose positions were forcibly liquidated.

The root cause was a race condition occurring during critical data operations. When the system synchronized data, a storage error led to corrupted data spreading across cloud infrastructure and eventually being published on Paradex Chain. The immediate effect of this issue was that several market funding indices were instantly reset to zero, creating abnormal price movements and triggering sequential liquidation activities across various trading markets.

In response to the incident, Paradex took swift action to control the situation. The platform temporarily closed access, canceled all open orders except for take-profit and stop-loss orders functioning as protections. Subsequently, the technical team carried out recovery procedures by restoring the blockchain state to the snapshot stored before the maintenance window began, ensuring data integrity was restored to normal.

As a form of accountability to the community, Paradex announced a compensation plan of $650,000 to be distributed to 200 users who suffered losses due to this technical error. This decision demonstrates the platform’s commitment to user trust and asset security. Although Paradex had previously experienced service availability disruptions due to database maintenance, this quick and transparent response emphasizes the platform’s efforts to improve its operational standards.

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