Crypto’s ‘Decentralized’ Illusion Shattered Again by Another AWS Meltdown

On the morning of October 20, 2025, Amazon Internet Providers (AWS) skilled a significant outage that resulted in widespread service outages throughout 1000’s of internet sites and functions.

A number of main exchanges and crypto service suppliers rely closely on cloud infrastructure akin to AWS to energy their buying and selling platforms, wallets, analytics instruments, and matching engines.

The ripple impact hit the crypto world: Coinbase reported that its buying and selling platform and its Base Layer-2 community each went down. Infura and ConsenSys’ Robinhood additionally suffered from the outage.

Virtually instantly, the crypto neighborhood sounded the alarm on social media that among the trade’s most recognizable firms are overly reliant on centralized infrastructure.

“In case your blockchain goes down due to the AWS outage, you aren’t decentralized sufficient,” Ben Schiller, head of communications at Miden and former CoinDesk editor, mentioned on X.

Maggie Love, the creator of SheFi, echoed that sentiment on X: “If we will not connect with the Ethereum mainnet when AWS goes down, we’re not decentralized.”

This wasn’t the primary time the cloud large prompted tremors within the crypto panorama. In April 2025, AWS suffered one other widespread disruption, inflicting a number of crypto exchanges and infrastructure suppliers to go offline.

In the meantime, infrastructure supplier Infura, which gives backend JSON-RPC and WebSocket APIs that permit wallets and apps to hook up with blockchains, shared Monday that the outage has disrupted a number of community endpoints. “Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base, and Scroll” had been all affected by a “recurring subject…associated to an ongoing AWS outage.”

As Infura’s help decreased, front-end entry for a lot of functions faltered. Whereas the distributed consensus layers remained intact, the gateways by means of which most customers work together with blockchains went offline, additional amplifying the disruption.

For layer 2 networks like Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, the incident revealed a central irony: Whereas these techniques are designed to decentralize execution and scale, a lot of their entrance ends, onboarding techniques, infrastructure gateways, and API layers nonetheless depend on centralized cloud companies. The outage underlines an ongoing stress inside crypto – protocols that promote decentralization nonetheless typically depend on centralized infrastructure for important operations. Even when blockchain nodes are distributed, the buying and selling engines, custodial platforms, and relayers that join customers to them sometimes run on a handful of main cloud suppliers, creating discrete factors of failure.

“The AWS outage is yet one more reminder that blockchain, and certainly the web itself, is barely as decentralized because the infrastructure it runs on,” mentioned Chris Jenkins, head of infrastructure operations at Pocket Community, a permissionless open knowledge community.

Others emphasised that true decentralization requires constructing and working layer 1 blockchains themselves.

“The disappearance of the bottom when AWS goes down is actually your complete argument in favor of EVM L1s like Sei,” mentioned Jay Jog, co-founder of Sei Labs. “True decentralization is about resilience. Ethereum is decentralized. Sei is decentralized. The overwhelming majority of L2s usually are not and could possibly be bricked by a large enough Web2 outage.”

That resilience has been demonstrated earlier than: Main layer 1 networks like Bitcoin, Ethereum, and Solana have continued to provide blocks and course of transactions in the course of the outage, due to their globally distributed validator units and unbiased node operators that aren’t tied to a single supplier. However some tasks have chosen to scale by way of the layer 2 route, making compromises at these decentralization factors in favor of quicker throughput and cheaper transaction charges.

Because the trade assesses the implications, the push to decentralize backend infrastructure continues to achieve urgency. Nevertheless it’s exhausting to say whether or not it’ll stick this time. The April incident prompted related warnings about over-reliance on centralized suppliers, however six months later this outage confirmed that not a lot had modified.

“The Web was designed with thousands and thousands of individuals in thoughts having their very own connections to it and sharing knowledge that means, however as giant centralized companies grow to be the de facto infrastructure of selection, each new app constructed utilizing the identical strategy solely makes the issue worse,” says Pocket Community’s Jenkins.

Learn extra: Binance, KuCoin and different crypto companies hit by Amazon Internet Service subject