Backpack DEX Users Face Balance Changes Post-Maintenance

On July 3, Backpack, a decentralized exchange (DEX) built on the Solana blockchain, experienced a significant mishap following a scheduled maintenance period. The platform halted trading at 10 a.m. UTC and was set to resume full trading at 12:10 p.m. UTC after a two-hour downtime. During this period, the exchange entered a post-only mode, allowing users to place or cancel maker orders but blocking taker activity. However, when the spot and perpetual markets came back online, several users reported abnormal balance changes and order reversals, indicating a post-maintenance error.

One user, identified as Defi Remora, reported that a $104,000 withdrawal request submitted the previous night was returned to his account in the form of 891 Solana (SOL) after the downtime. Additionally, the exchange expanded his margin debit from 31,000 USDT to 111,000 USDT, leaving him to unwind the position manually at an estimated cost of $300 to $400. Another user, Hebi, reported that long positions flipped to short positions and that some holdings disappeared without a trace on the ledger. Hebi also noted that no audit trail appeared in the account history and that the errors coincided with Backpack’s downtime.

In response to these issues, Backpack CEO Armani Ferrante addressed the events in a message to the project’s Discord channel, calling the incident “a programming error” and “unacceptable.” He assured users that the engineering team would conduct a detailed review and enhance the process to prevent such incidents in the future. Ferrante also asked affected customers to email [email protected] and stated that he would personally handle the claims, promising compensation for any issues caused by the exchange’s fault. He reiterated that the incident did not involve custody infrastructure, claiming that the funds are completely safe due to the use of a two-tier multi-party computation wallet combined with cold storage custody and continuous asset-by-asset balance reconciliation.

Ferrante did not offer a timetable for a post-mortem but said the company would publish findings after completing an internal audit. He also reiterated Backpack’s policy of reimbursing any user loss caused by exchange malfunctions, including inadvertent liquidations or mis-priced fills. To compensate users who had open positions and qualified for the potential airdrop of a Backpack native token, the company promised double the points for users with active trading positions on July 3.

This incident highlights the challenges and risks associated with decentralized exchanges and the importance of robust error-handling mechanisms and user support systems. The response from Backpack’s CEO demonstrates a commitment to transparency and user compensation, which is crucial for maintaining trust in the platform. As the exchange continues to investigate the root cause of the issue and implement corrective measures, users and the broader community will be watching closely to ensure that such incidents are prevented in the future.