Bitcoin Plummets to $0 on Paradex Due to Starknet Glitch — Mass Liquidations Force Rollback

A recent technical glitch on Paradex led to Bitcoin briefly trading at $0, triggering mass liquidations across the exchange. This incident prompted the team to initiate a rare chain rollback to correct the issue, highlighting significant vulnerabilities in decentralized trading platforms.

Key Takeaways

Bitcoin's price dropped to $0 on Paradex following a glitch during routine maintenance.
The mishap caused widespread liquidations in the markets for Bitcoin, Ethereum, and Solana.
Paradex's team executed a rollback to restore normal trading conditions, but profits earned post-rollback will be lost.
The platform, which handles significant trading volume, faced service outages and warned users about scams post-incident.

Bitcoin Plummets to $0 on Paradex Due to Starknet Glitch — Mass Liquidations Force Rollback

Understanding the Paradex Glitch and Rollback

On early Sunday, Bitcoin was reported to have traded at zero on Paradex due to a technical failure occurring during scheduled maintenance. This sparked widespread liquidations across the decentralized perpetual futures exchange, leading to a decision for a rare chain rollback.

The issue emerged shortly after Paradex initiated database maintenance at around 4:30 a.m. London time. Within minutes, users started highlighting that prices for various perpetual contracts, including Bitcoin and Ethereum, had fallen to near-zero.

Screenshots and videos circulating on social media depicted a flurry of liquidation notifications flooding the platform concurrently. This suggests a malfunction occurred in the exchange's pricing mechanism or oracle feed during the maintenance.

Timestamped reports show that the peak of this turmoil transpired around 05:02 UTC on January 19, 2026.

Chain Rollback to Mitigate Liquidation Damage

During this brief period, numerous long positions across different markets were liquidated at a value marked as $0. Bitcoin perpetual contracts faced mass liquidations while certain short positions settled at typical market prices, indicating a significant discrepancy affecting one side of the order book.

The abrupt drop in pricing compelled leveraged positions to close, preventing potential negative balances, which exacerbated the overall damage in mere seconds.

About three hours post-event, Paradex's engineering director, Clement Ho, addressed users via Telegram, confirming that the problem had been identified and the team was proceeding to roll back the chain state to block 1,604,710, recorded at 04:27:54 UTC.

Image of Paradex Issues Announcement

Ho clarified that this block was the last known correct state before maintenance began. Paradex reiterated on its website that recovery efforts were in motion, ensuring all user funds remained secure.

In this context, a rollback refers to reverting the blockchain and relevant system state back to a prior point, effectively voiding all transactions, deposits, and liquidations that happened after that block.

While users who were incorrectly liquidated might see their positions reinstated, any gains made after the rollback timestamp would be nullified.

Rollbacks in decentralized environments are generally seen as a last resort because they compromise the core principle of immutability that blockchains aim to uphold.

Services Restored Post Outage Amid Scam Warnings

Paradex operates on Starknet as a decentralized perpetual futures exchange and has evolved into a significant platform for on-chain derivatives trading.

According to DefiLlama, the platform's trading volume reached nearly $1.6 billion the day before this incident, with approximately $225 million in user deposits.

Image Showing Paradex Trading Volume

CoinGecko highlighted about $652 million in open interest over the last 24 hours, and Paradex ranks among the top ten decentralized perpetual exchanges with over $37 billion in trading volume over the past month.

In the aftermath of the liquidation events, Paradex experienced a service outage impacting its trading interface, APIs, blockchain components, bridge, and block explorer.

During the recovery phase, the exchange announced it would cancel all open orders except for take-profit and stop-loss orders. Updates later confirmed that the platform and vault withdrawals were reinstituted, though deposits and withdrawals for Gigavault would remain paused for a period of up to 24 hours.

The team also issued alerts about fraudulent support accounts impersonating Paradex staff during the crisis, urging users to stick to official channels.

This incident has reignited discussions about the technical risks associated with on-chain derivatives markets, which have seen multiple disruptions in recent months. Aster, another leading perps exchange by volume, has experienced several setbacks due to targeted trading strategies, including a notable event in September linked to an abnormal price surge in its XPL perpetual contract.