Key takeaways
Why were most crypto applications affected by the AWS outage?
Most of them still rely on AWS as their sole cloud provider for their on-demand computing needs.
Will this be a wake-up call for the sector?
This remains to be seen, as adoption of Web3 cloud providers like Akash Network remains somewhat measured.
The Amazon Web Services (AWS) outage confirmed that most Web3 applications are far from being “truly” decentralized.
On October 20, the hours-long AWS outage paralyzed most protocols, including the Base application, the Ethereum Layer 2 incubated by the Coinbase exchange.
Users were blocked with a ‘zero balanceIssue View and other services were temporarily inaccessible.
Source:
The protocol linked the problem to “testing,” but nearly half of the internet was affected on Monday. In fact, even the Coinbase exchange had degraded services.
Other centralized exchanges like Crypto.com has been facing similar issues, preventing users from accessing trades and transfers.
Is AWS the weak link in crypto?
Surprisingly, even non-custodial crypto wallets (which grant you full control over funds) were affected. MetaMask, for example, was crippled alongside most Ethereum L2, according to Infura data.
Part of the Infura report read,
“The issue recurred due to an ongoing AWS outage, affecting multiple Infura Mainnet JSON-RPC APIs (Ethereum, Polygon, Optimism, Arbitrum, Linea, Base, Scroll”
For comparison, most protocols and applications opt for on-demand cloud services to save on computing resource costs, including electricity bill. CCurrently, AWS, Google and Oracle dominate the field and Web3 players are counting on them.
Think of it as if the protocol is “decentralized”, but some of the underlying physical infrastructure is centralized and can become a risk factor.
So while the AWS outage lasted for hours, so did most Web3 applications and protocols.
Source: Downdetector
Some users took to social media to accuse Web3 players of their folly. A said,
“So AWS went down and half of the cryptocurrencies simply stopped working. The decentralization vibes are off the charts today.”
As of this writing, AWS has resolved the problem and services are back online. However, friction derailed Sunday’s recovery. Bitcoin (BTC) had risen to over $110,000, but immediately returned when the outage hit crypto exchanges.
Such friction on centralized exchanges tend to cause sell-offs similar to the recent flash crash.
It remains to be seen whether players will adopt Web3 alternatives to AWS like Akash Network (AKT)which was somewhat measure at the time of going to press.
Source: Akash (network usage on Akash)
