Key Highlights
- Paradex refunded $650,000 across 200 accounts, mainly tied to PAXG liquidations.
- The incident began with a database migration error that caused invalid pricing and forced liquidations.
- The exchange rolled back state, reopened in stages, and says the platform is now running normally.
Paradex, a Starknet-based perpetuals exchange, said it refunded $650,000 to about 200 users after a database migration error triggered incorrect liquidations, mainly involving PAXG.
In an X post on Tuesday, the exchange said funds were distributed after an internal review and confirmed that the platform has returned to normal operations, including deposits and withdrawals.
What happened
The disruption started during scheduled database maintenance, when pricing briefly became invalid on the platform. That bad data flowed into the liquidation engine, and positions were automatically closed at levels traders say never should have existed.
Paradex later confirmed it would roll back the chain state to the last known correct block, effectively restoring accounts to a pre-maintenance snapshot. Such rollbacks are rare in decentralized systems because it rewinds settled activity.
How it was contained
Rather than flipping the switch back to full trading immediately, the exchange brought the venue online in steps:
- Cancel-only mode: users could reduce risk and exit, but not place active new trades
- Post-only mode: users could place orders without immediate taker execution
- Full trading: reopened once the team said system integrity checks were complete
Voyager, a Starknet block explorer, showed block production continuing normally during the recovery window, signaling the underlying network was stable while Paradex handled its own rollback and restart.
Refunds and changes
In its latest update, Paradex said it completed its review and reimbursed $650,000 across 200 accounts, primarily connected to PAXG liquidations (PAXG is a token backed by gold).
The exchange also said Gigavault deposits and withdrawals are live again (Gigavault is Paradex’s deposit/withdrawal rail). Support tickets tied to these refunds will be closed automatically, with remaining tickets reviewed over the next few days.
Trust is earned in the response
Derivatives venues don’t get graded on perfect uptime; they get judged on what happens when something breaks. In this case, the critical pieces were speed and clarity: isolate the damage, restore a clean state, then make impacted users whole with a concrete number and a visible process. As of today, the platform is running normally.
Refunds do not erase the incident, but they answer the question traders care about most: when the platform is wrong, does the platform pay.
Paradex is built as an appchain on Starknet (an Ethereum Layer 2). That architecture aims to deliver fast, non-custodial perps, but the incident was another reminder that “onchain” doesn’t eliminate operational risk. When core systems like databases, pricing feeds, or liquidation logic misfire, the losses can be immediate, and the response has to be both technical and financial.
Also read: Makina Finance Hacked: MEV Bot Snipes 1,299 ETH in $4M Protocol Exploit
