Members of the dYdX community are evaluating a new compensation proposal aimed at reimbursing traders who incurred losses during the chain halt on October 10.
The plan outlines a total of $462,097.79 in payouts to be distributed in USD Coin (USDC) from the protocol’s Insurance Fund.
A post published on October 28 to the dYdX governance forum revealed that the support team had verified 27 eligible claims after reviewing the incident. The Insurance Fund, currently valued at roughly $16.2 million, would cover all reimbursements if the community votes in favor.
The disruption occurred at approximately 5:35 PM ET on October 10, when the dYdX Chain, built atop Cosmos Hub, entered an automatic halt triggered by an unusual bug within its isolated market configuration.
The issue surfaced amid heightened volatility, causing the system to detect a negative balance and suspend operations to preserve state integrity.
Validators required several hours to restart Oracle services fully, and outdated price feeds briefly circulated once activity resumed. Although user deposits on-chain remained secure, a number of traders faced liquidations and erroneous trade executions, resulting in tangible losses.
In a post-mortem published October 27, dYdX Labs attributed the malfunction to a recent code update that had not been properly structured.
The review also highlighted validator coordination gaps, a familiar challenge in proof-of-stake ecosystems, leading to short-term oracle desynchronization during recovery.
The proposal emphasizes that compensating affected users would demonstrate dYdX’s commitment to transparency and reinforce confidence in its decentralized governance framework.
Comparisons have been drawn to Binance’s $400 million recovery initiative, introduced earlier this month to support users impacted by its own technical failures.
Community feedback is now being gathered before an on-chain vote determines whether the reimbursements proceed.