DYdX payout proposal plans $462K reimbursement after an eight-hour outage halted trading during crypto’s biggest liquidation event.
Author: Akshat Thakur
October 28, 2025 – The DYdX payout proposal has emerged after the decentralized exchange suffered an eight-hour outage during one of the largest liquidation events in crypto history. The governance community is set to vote on compensating affected traders with up to $462,000 from the protocol’s insurance fund.
According to the post-mortem shared by dYdX on Oct. 10, the outage resulted from a misordered code process that stalled validator restarts. When the chain resumed, the matching engine processed trades at incorrect prices due to stale oracle data, causing liquidation-related losses for a subset of traders.
The DYdX payout proposal recommends drawing $462K from the protocol’s insurance fund to reimburse affected users proportionally.
If approved, the funds will be distributed based on transaction and liquidation logs verified onchain.
Under DYdX’s DAO framework, the proposal will proceed through:
The DYdX payout proposal underscores how decentralized governance can act swiftly during operational failures a model of transparent, community-led recovery.
Analysts suggest the DYdX payout proposal could set a precedent for DAO-led user protection frameworks.
By compensating losses from the insurance pool instead of centralized intervention, DYdX demonstrates the viability of self-correcting DeFi ecosystems.
The proposal follows Binance’s $728 million response to the same market crash including a $45 million BNB airdrop to memecoin traders highlighting how exchanges, centralized or decentralized, are racing to restore user trust after high-volatility events.
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