Decentralized exchange (DEX), dYdX announced plans to compensate users affected by a recent outage on the dYdX Chain and has shared details of the reimbursement process. The disruption was caused by a misordered procedure in collateral pool transfers during liquidations within isolated markets. Although the insurance fund held sufficient capital to cover losses, this error triggered a protocol-level failsafe, temporarily pausing the chain to protect overall system integrity.
The underlying issue has been resolved. The sequence of liquidation and collateral transfers has been corrected, with additional checks on the order of operations and automated testing implemented to prevent similar incidents. Coordination is ongoing with the Operations subDAO, the Foundation, and network validators to improve incident response and reduce recovery times in the event of future disruptions.
The dYdX User Support team has been in direct contact with affected traders through X, Discord, and the dydx.trade Intercom support platform. A detailed review of all trades impacted during the outage was conducted, covering the period from October 10th, 2025, at 21:52:22 UTC, when the chain first resumed with oracle price inconsistencies, to October 11th, 2025, at 05:35:00 UTC, when oracle data was fully restored. The compensation methodology involved examining all liquidations and deleveraging events that occurred while the chain was halted, identifying trades executed at incorrect prices due to temporarily stale oracle data, and calculating what the trade outcomes would have been if executed at accurate market prices reflected by other exchanges during that time.
The outage occurred due to a misordered code process, and its impact was prolonged by delays in validators restarting their oracle sidecar services. When the chain resumed operations, the matching engine executed trades and liquidations at incorrect prices because of stale oracle data, resulting in losses classified as protocol-level execution errors. In response, the dYdX governance community may consider compensating affected users using the protocol’s insurance fund. If approved, the compensation would utilize only a small portion—2.85% of the fund, approximately $462,000 of the $16 million total—balancing user restitution with the preservation of overall protocol security.
Over the past eight years, dYdX has established itself as a trusted and resilient decentralized finance platform, recently surpassing $1.5 trillion in total trading volume. Incidents of this nature highlight the ongoing importance of transparency, trust, and proactive communication, principles that remain central to the platform’s operations. The team expresses gratitude for the continued support of the community and remains committed to maintaining the reliability and resilience of the dYdX Chain for all users.
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