A Major Outage Shakes the Crypto World
On the morning of October 20, 2025, a significant outage at Amazon Web Services (AWS) led to extensive disruptions affecting numerous websites and applications. Many prominent cryptocurrency exchanges and service providers depend on cloud solutions like AWS to operate their trading platforms, digital wallets, analytics tools, and matching engines. The ramifications of this outage were felt deeply within the crypto sector, with Coinbase reporting failures in both its trading platform and the Base layer-2 network. Other notable players, including ConsenSys’ Infura and Robinhood, also experienced significant service interruptions during this incident.
Concerns Over Centralization Rise
The crypto community swiftly took to social media to raise concerns about the excessive reliance on centralized infrastructure by some of the industry’s most well-known companies. Ben Schiller, Head of Communications at Miden and former editor at CoinDesk, expressed on X, “If your blockchain is down because of the AWS outage, you’re not sufficiently decentralized.” Meanwhile, Maggie Love, founder of SheFi, echoed this sentiment, stating, “If we cannot connect to Ethereum mainnet when AWS goes down, we are not decentralized.”
A History of AWS Disruptions
This incident marks yet another instance where AWS has caused significant upheaval in the crypto ecosystem. Back in April 2025, a similar disruption impacted multiple crypto exchanges and infrastructure services. Infura, a key infrastructure provider that facilitates backend connections for wallets and applications to blockchains, announced that the recent outage had disrupted various network endpoints, affecting Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base, and Scroll due to a “recurring issue” associated with the ongoing AWS outage.
The Irony of Layer-2 Networks
As Infura’s services were compromised, many applications faced interruptions in their front-end access. Although the underlying blockchain consensus layers remained functional, the points of user interaction went offline, exacerbating the overall disruption. For layer-2 networks like Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, this incident highlighted a notable paradox: while these systems aim to enhance decentralization and scalability, their front-end interfaces, onboarding mechanisms, infrastructure gateways, and API layers often still depend on centralized cloud providers. This situation illustrates a persistent conflict in the crypto space—protocols designed to promote decentralization frequently rely on centralized infrastructure to facilitate essential operations.
The Lessons of Decentralization
Chris Jenkins, the head of infrastructure operations at Pocket Network, remarked, “The AWS outage once again reminds us that blockchain, and really, the internet itself, is only as decentralized as the infrastructure it runs on.” Many commentators stressed that genuine decentralization necessitates building and functioning on layer-1 blockchains directly. Jay Jog, co-founder of Sei Labs, noted, “Base going down when AWS goes down is literally the entire argument in favour of EVM L1s like Sei. Real decentralization is about resilience.” He pointed out that while Ethereum and Sei exhibit true decentralization, a significant number of layer-2 solutions lack such resilience and could be severely impacted by a substantial Web2 outage.
Resilience of Layer-1 Networks
The resilience of major layer-1 networks like Bitcoin, Ethereum, and Solana was evident during the AWS outage, as they managed to continue producing blocks and processing transactions. This was possible due to their globally distributed validator sets and independent node operators that are not reliant on any single provider. Conversely, some projects have chosen to pursue scaling through layer-2 solutions, thereby sacrificing certain aspects of decentralization in favor of expedited transaction speeds and lower costs.
The Urgency for Backend Decentralization
As the industry grapples with the implications of this recent outage, the movement towards decentralizing backend infrastructure is becoming increasingly urgent. However, the likelihood of sustained change remains uncertain. The April incident had prompted similar discussions about the risks of over-dependence on centralized providers, yet this latest outage indicates that little progress has been made since then. Jenkins of Pocket Network observed, “The internet was designed with the idea that millions of people would be running their own connections to it, but with major centralized services becoming the default choice for infrastructure, every new app built using the same approach only exacerbates the issue.”
