The dYdX community is reviewing a governance proposal to compensate traders who incurred losses during an eight-hour chain halt on October 10, with total payouts set at $462,097.79 from the protocol's $16.2 million insurance fund.
According to dYdX Labs' post-mortem report, the outage occurred at approximately 5:35 PM ET on October 10 due to a rare code bug in the isolated market configuration, triggered during a period of extreme market volatility. This caused the dYdX Chain, built on Cosmos, to halt automatically to maintain network integrity.
Validators faced delays in restarting oracle services, leading to stale price feeds and incorrect trade executions and liquidations once the network resumed. Although no on-chain funds were lost, 27 verified claims were identified for users who suffered financial losses.
The proposal aims to distribute compensation in USD Coin (USDC) to bolster confidence in dYdX's decentralized governance, with community sentiment largely positive for swift approval. This incident has been compared to Binance's $400 million user support initiative following similar disruptions.
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