A technical glitch on Paradex, a decentralized derivatives exchange built on Starknet, caused the price of Bitcoin to briefly appear as zero.
Incorrect data caused by database migration issues were quickly detected by algorithmic systems across the platform. As leveraged positions were liquidated en masse, Paradex halted trading and initiated rollbacks to limit the damage.
Although service has since been restored, the incident has reignited debate about the operational resilience and governance practices of decentralized finance (DeFi) infrastructure.
Important points
- Paradex reported a database migration error that caused Bitcoin price to hit $0.
- Derivatives exchanges resumed trading after emergency rollbacks.
- Users reported widespread liquidations caused by zero price feeds.
- Starknet’s Strak According to CoinMarketCap, the token fell by around 5% after the incident.
- At the time of the turmoil, Bitcoin was trading for less than $93,000 worldwide.
Trigger automatic liquidation due to database error
The confusion started during a routine database migration at Paradex. In the process, Bitcoin was accidentally set to zero in the exchange’s internal systems.
The false price was quickly detected by an automated trading program. As a result, leveraged positions were automatically closed without human intervention, magnifying losses across the platform.
Once the anomaly was identified, Paradex limited further damage by halting all trading activity.
Dealing with transaction suspension and rollback
Following the outage, Paradex initiated a rollback to restore accurate records and system integrity. Most open orders were canceled as part of the recovery process, but take profit and stop loss instructions remained active to maintain basic risk management.
According to the exchange, trading access was restored around 12:10 UTC on January 19th. Paradex assured users that all funds are kept safe, noting that the collection process is technically complex and ongoing.
The incident also weighed on sentiment surrounding Starknet more broadly. that native Strak According to CoinMarketCap, the token fell by about 5% immediately after the turmoil.
Bitcoin prices in other venues remained relatively stable. At the time of writing, Bitcoin is trading at $91,076, down 1.8% in the past 24 hours.
Analysts at CryptoQuant believe the recent selling pressure was on US investors beyond ETF products, noting that no US Bitcoin ETFs were trading during the incident.
Meanwhile, Bitfinex analysts noted that the market structure is gradually improving, but warned that selling pressure continues amid macroeconomic and geopolitical uncertainties.
User backlash and governance questions
Reactions to X after the rollback were mainly negative. Some users questioned whether decentralized exchanges should reverse on-chain activity in the first place.
Some have expressed concerns about Starknet’s maturity as a Layer 2 network. While some acknowledged Paradex’s timely communication, many said the incident eroded trust in both the platform and the broader ecosystem.
