Decentralized exchange dYdX is preparing for a community vote on whether to reimburse users who suffered losses during an eight-hour chain outage earlier this month.
The proposal would compensate affected users up to $462,097 from the protocol insurance fund. The outage happened on October 10, during the height of a major crypto market crash that triggered what analysts described as the largest liquidation event in crypto history.
The dYdX’s post-mortem report stated, “The outage arose from a misordered code process, and its duration was exacerbated by delays in validators restarting their oracle sidecar services.” When validators later restarted their services, some relied on outdated oracle price data. As a result, trades and liquidations were processed at incorrect prices.
No funds were lost directly on the blockchain. However, some traders were liquidated or suffered losses they would not have incurred if accurate price feeds had been available. The affected period covers trades between Oct. 10 at 21:52 UTC and Oct. 11 at 05:35 UTC.
dYdX’s insurance fund currently holds around $16 million. The proposed payout would represent about 2.85% of that total. The final decision will be made through a governance vote by token holders, who must decide whether the issue qualifies as a protocol-level execution failure that merits compensation.
Impact of the Market Crash on Other Exchanges
The incident has drawn comparisons to Binance’s response during the same market crash. The crypto market plunged on October 10 after former U.S. President Donald Trump announced plans for a 100% tariff on Chinese imports, sparking panic across global markets.
The comments set off a wave of risk-off trading and resulted in more than $19 billion in leveraged positions being wiped out in a matter of hours, leaving over 1.6 million traders liquidated.
Binance also drew complaints from traders who said glitches and frozen price feeds made it impossible to close their positions during the sell-off.
Binance did not accept liability for the losses, but it introduced a $400 million relief plan for affected traders. Most of the support comes through stablecoin vouchers and funding for impacted ecosystem users. The exchange also launched a separate BNB airdrop for memecoin traders. In total, Binance has pledged around $728 million in assistance linked to the crash.