Starknet’s Paradex Exchange Rocks Crypto World with Controversial Blockchain Rollback After $0 Bitcoin Glitch

Chaos erupted on Monday as Paradex, a Starknet-based perpetuals exchange, suffered a critical technical malfunction. Bitcoin’s price on the platform briefly plummeted to an unprecedented “$0,” triggering a cascade of automatic liquidations. In a highly unusual and contentious move, the exchange’s officials announced a blockchain “rollback,” sending shockwaves through the crypto community and igniting fierce debate.

The Unfolding Disaster: Bitcoin at Zero and Mass Liquidations

Reports quickly flooded social media platforms from distressed users. They described witnessing Bitcoin’s price on the Paradex interface instantaneously collapse to zero, only to rebound just as swiftly. However, in the brief window before recovery, thousands of trading positions were flagged as liquidated by the system and forcibly closed, leaving many traders with substantial losses.

One user, @sniiperrB, encapsulated the initial confusion and subsequent alarm: “I initially thought it was just a UI bug. Then I saw on the computer that the price came back after going to $0. Now there are thousands of liquidations. This doesn’t look good for @paradex ☠️.” Their post, accompanied by screenshots, quickly went viral, highlighting the severity of the incident.

🩸🚨Okay, when I posted the screenshot, I thought it was a UI bug.

Then I saw on the computer that the price came back after going to $0.

Now there are thousands of liquidations.

This doesn’t look good for @paradex ☠️ https://t.co/m4YbnfHkgN pic.twitter.com/QbKd3U432s

— Sniper ₿ (@sniiperrB) January 19, 2026

Paradex’s Unprecedented Response: The Blockchain Rollback

In the wake of the catastrophic failure, Paradex officials took to Discord to address the community. They identified the root cause as an error during a database migration. To rectify the issue, the team made the extraordinary and controversial decision to perform a “rollback” of the blockchain.

Clement Ho, Engineering Director at Paradex, confirmed that the system would revert to block height 1604710 – the last correct block before maintenance commenced. This drastic measure means that all transactions, liquidations, and even deposits and withdrawals executed during the incident period will be “reversed.” The objective is to restore the exchange to its precise state prior to the glitch.

While this move aims to rescue users who were unjustly liquidated, it simultaneously nullifies any legitimate, profitable trades made during the affected timeframe. This “undoing” of history has naturally sparked a polarized reaction, with some praising the attempt at restitution and others decrying the erosion of blockchain’s core principles.

The Philosophical Dilemma: Finality vs. Recovery in a Decentralized World

In the realm of blockchain, “rewriting history” is universally considered an extreme last resort. It fundamentally contradicts the bedrock principle of decentralized systems: the immutability and finality of transactions. Once a transaction is validated and confirmed, it is meant to be irreversible, etched permanently into the ledger.

Consequently, when most public chains or protocols encounter significant failures, the standard protocol involves pausing operations or implementing targeted fixes to contain the damage, rather than rolling back completed transactions. Paradex’s decision to employ a “rollback” mechanism is, for many, an implicit admission that its existing protective measures failed spectacularly.

The choice to roll back the ledger transcends mere technical adjustments; it ignites profound questions about the very nature of decentralization. If a platform that purports to be decentralized can effectively “one-click restart” or “undo history,” does it truly represent the future of finance governed by collective consensus, or merely a centralized ledger system where a handful of developers wield ultimate authority over its past and present?