The Chaos Schedule at Paradex: Bitcoin Plummeted to Zero Due to Database Error

The decentralized exchange Paradex suffered a catastrophic collapse when a faulty database migration caused Bitcoin’s price to suddenly drop to zero on the platform. The failure triggered massive liquidations of positions and kept the service offline for approximately eight hours, from the incident until its restoration at 12:10 UTC.

The Technical Crisis: Failed Migration and Chain Reversal

Paradex confirmed that it had to revert its blockchain to block 1,604,710 to undo the corrupted data generated by the database migration. This critical error not only showed an inaccurate price but also activated an automatic liquidation mechanism that forcibly closed all open orders, except for take-profit and stop-loss (TPSL) orders.

A Paradex team spokesperson explained on Discord that the reversal was necessary to restore the state to before the problem occurred. Despite the complexity of the recovery process, the platform stated that all user funds remained intact (SAFU).

Market Impact: STRK Falling and Volume at Risk

Starknet’s STRK token experienced downward pressure after the incident, showing a 6.35% decline in the last 24 hours according to 2026 data. Paradex had processed $37 billion in trading volume during the thirty days prior to the failure, a figure now under question due to eroded trust.

Why Appchains Are Vulnerable: An Ongoing Debate

Appchains, designed as individual blockchains dedicated to a single application (in this case, an exchange), offer developers greater control over performance and fees. However, their specialized architecture also concentrates technical risks. Issues such as database errors, smart contract failures, or integration defects can disproportionately impact normal operation.

Blockchain reversal—restoring the state to an earlier point in time—is an emergency solution questioned by the community. Flow, the Layer 1 network, proposed a reversal in December but retracted it after negative community reactions concerned about compromising decentralization and immutability.

Background: Turbulent Months for Paradex

This is not the first serious incident. In September, Paradex faced a prolonged outage caused by a bot attack that overloaded its legacy account creation systems, resulting in widespread latency and forced order cancellations. The history suggests structural problems in the infrastructure.

Paradex was founded by Paradigm, a liquidity network that faced business challenges after the FTX collapse in 2022, when 7 of its top 10 clients declared bankruptcy, according to co-founder and CEO Anand Gomes. This context adds layers of complexity to the project’s credibility.

Bitcoin Price Today: Current Context

While Paradex was resolving its crisis, Bitcoin (BTC) was trading at $78,230 USD in normal markets. The contrast between the fictitious zero price on Paradex and the real value on other platforms underscores the importance of robust infrastructure in decentralized trading.