Simply put
- A database migration problem at the decentralized exchange Paradex caused Bitcoin’s price to display as $0, triggering a wave of liquidations.
- This issue necessitated a rollback of the blockchain to its last stable state prior to the glitch.
- As per the exchange’s status page, services have been restored, and users’ funds are secure.
The price of Bitcoin plunged to $0 overnight on Paradex, as many users reported an issue stemming from database migration that impacted the Paradex blockchain, including its explorers and APIs.
The glitch was first noted on the Paradex Status Page shortly after Bitcoin’s price dropped to zero, with social media reflecting a series of liquidations.
By around 2 a.m. ET, the exchange recognized the issue and started the process to revert the Paradex Chain, which is based on the Starknet technology, a layer 2 scaling solution for Ethereum.
“We’ve pinpointed the problem and will roll back the chain to block 1604710,” a status update indicated, stating this was the last known good point prior to the database maintenance. All accounts would revert to their state before the issue.
Not long after, Paradex canceled all pending orders and confirmed around 5 a.m. ET that users’ funds were secure, with the recovery process underway.
“Recovery efforts are ongoing. All user funds are safe,” a notice on the status page confirmed at 5:16 a.m. ET.
It’s still hazy how large the liquidation reached, but DeFiLlama data suggested that the perps protocol had about $641 million in open interest, having facilitated roughly $37 billion in financing over the last month.
All services on Paradex are reportedly back online now.
The recent fluctuations in Bitcoin prices coincided with a period of volatility, where its value fell from over $95,000 to $92,284 just after 7 p.m. on Sunday. This 2% drop in 24 hours knocked down the weekly gain to 1.4%, with Bitcoin trading around $93,318.
This decline has caused liquidations to exceed $875 million in the past day, including about $234 million related to Bitcoin.
