Bitcoin briefly appeared to trade at zero on Paradex early Sunday after a technical failure during scheduled maintenance triggered mass liquidations across the decentralized perpetual futures exchange, forcing the team to announce a rare chain rollback to reverse the damage.

The incident unfolded shortly after Paradex carried out database maintenance at around 4:30 a.m. London time.

Within minutes, traders began reporting that prices on several perpetual markets, including Bitcoin, Ethereum, and Solana, had collapsed to near-zero levels.

Screenshots and videos shared on social media showed a flood of liquidation alerts hitting the platform almost simultaneously, suggesting that the exchange’s pricing mechanism or oracle feed had malfunctioned during the update.

Timestamped alerts indicate the most intense activity occurred around 05:02 UTC on January 19, 2026.

Inside Paradex’s Chain Rollback After Mass Liquidations

During that brief window, long positions across multiple markets were liquidated at prices displayed as $0.00.

Bitcoin perpetual contracts saw numerous long liquidations at zero, while some short positions were closed at normal market prices near $92,600, pointing to an issue that disproportionately affected one side of the order book.

The sudden repricing automatically forced leveraged positions to close to prevent negative balances, amplifying the damage in a matter of seconds.

Roughly three hours after the event, Paradex director of engineering Clement Ho addressed users on Telegram, confirming that the team had identified the issue and would roll back the chain state to block 1,604,710, timestamped at 04:27:54 UTC.

Ho noted that this block represented the last known correct state before the maintenance began. Paradex later echoed the message on its website, stating that recovery efforts were underway and that all user funds remained safe.

A rollback in this context means reverting the blockchain and associated system state to a point before the faulty transactions occurred, effectively canceling all trades, deposits, and liquidations that took place after that block.

While improperly liquidated users may see their positions restored, any profits earned after the rollback point would also be erased.

Such actions are widely considered a last resort in decentralized systems because they undermine the principle of immutability that blockchains are designed to uphold.

Paradex Restores Services After Outage, Warns Users of Impersonation Scams

Paradex operates on Starknet as a decentralized perpetual futures exchange and has grown into a sizable venue for on-chain derivatives trading.

Data from DefiLlama shows the platform processed nearly $1.6 billion in trading volume the day before the incident and holds around $225 million in user deposits.

CoinGecko reported approximately $652 million in open interest over the past 24 hours, and over a 30-day period, Paradex ranks among the top ten decentralized perps exchanges, with more than $37 billion in reported trading volume.

Following the liquidations, Paradex reported a platform-wide service outage affecting its trading interface, APIs, blockchain components, bridge, and block explorer.

As part of its recovery process, the exchange said it would force-cancel all open orders except take-profit and stop-loss orders.

Later updates confirmed that the platform and vault withdrawals had been re-enabled, though deposits and withdrawals for Gigavault would remain paused for up to 24 hours.

The team also issued warnings about fake support accounts impersonating Paradex staff during the outage, urging users to rely only on official channels.

The incident has renewed scrutiny around technical risk in on-chain derivatives markets, which have faced a series of disruptions in recent months.

Aster, a top perps exchange by volume, has suffered repeated losses after being targeted by sophisticated trading strategies, including a high-profile incident in September when following an abnormal price spike in its XPL perpetual contract.

The post Bitcoin Hits $0 on Paradex After Starknet Glitch — Mass Liquidations Force Rollback appeared first on Cryptonews.

• Starknet uses zero-knowledge rollups to batch transactions off chain and settle on Ethereum.
• The project is also pursuing Bitcoin DeFi integration through its BTCFi initiative.
• The STRK token price remained stable despite the disruption.

Starknet, an Ethereum layer-2 network built on zero-knowledge rollups, entered 2026 dealing with an unexpected mainnet disruption that temporarily interrupted network activity.

The incident surfaced at a moment when layer-2 infrastructure is increasingly critical to Ethereum’s scaling roadmap, with developers and users relying on these networks for faster execution and lower costs.

As decentralised applications expand across finance, gaming, and experimental Bitcoin-linked use cases, even short periods of downtime draw attention to operational resilience.

The latest disruption placed Starknet under that spotlight, testing its response processes while the broader ecosystem monitored network stability.

The Starknet team acknowledged the issue through an X post, confirming that the network was experiencing downtime and that engineers were actively investigating the cause.

The update stressed that work was underway to restore full functionality as quickly as possible, although no technical explanation was shared at the time.

When the message was published, the mainnet had already been unavailable for just over two hours, marking a notable interruption for developers and users relying on live applications.

Network interruption

The disruption did not come with immediate details on whether transaction sequencing, proof generation, or another component was affected.

Starknet’s architecture relies on batching large volumes of transactions off chain before submitting cryptographic proofs to Ethereum.

Any failure along that pipeline can temporarily halt activity, even if user funds remain secure on the base layer.

During the outage window, on-chain data indicated stalled execution rather than loss of state, aligning with typical safety mechanisms used by ZK-rollup networks.

How Starknet works

Starknet operates as a ZK-rollup based layer-2, processing transactions away from Ethereum’s main chain and periodically settling them with validity proofs.

This design aims to deliver higher throughput and lower fees while inheriting Ethereum’s security guarantees.

The network has positioned itself as an infrastructure for complex smart contracts, decentralised finance protocols, and gaming applications that require fast settlement.

Its reliance on cryptographic proofs means performance gains are tied closely to the reliability of off-chain components.

Bitcoin DeFi focus

Beyond Ethereum-native use cases, Starknet has been promoting a Bitcoin DeFi, or BTCFi, arc.

The initiative frames the network as a bridge for Bitcoin-related financial applications seeking exposure to Ethereum’s programmability.

By enabling Bitcoin-linked assets or logic to interact with decentralised applications, Starknet has aimed to broaden its relevance beyond a single ecosystem.

The timing of the disruption, however, highlights how operational stability remains central as these cross-ecosystem ambitions develop.

Market response

Despite the mainnet downtime, the STRK token price held steady at $0.08898 at the time of writing, suggesting limited immediate market reaction.

Short-term resilience in the token contrasted with the technical interruption, indicating that traders may be viewing the issue as operational rather than structural.

As engineers continued work on restoring full functionality, attention remained focused on updates from the team and the duration of the disruption rather than price volatility.

The post Starknet faces fresh mainnet disruption appeared first on CoinJournal.