**Key Takeaways**
– Most crypto apps were affected by the AWS outage because they still rely on AWS as their sole cloud provider for on-demand computational needs.
– Whether this outage will serve as a wake-up call for the sector is uncertain, as adoption of Web3 cloud providers like Akash Network remains limited.
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On October 20th, a widespread Amazon Web Services (AWS) outage lasting several hours exposed a major vulnerability in the Web3 ecosystem: despite claims of decentralization, many applications remain heavily dependent on centralized infrastructure.
The outage crippled numerous protocols, including Base—the Ethereum Layer 2 solution incubated by Coinbase. Users encountered a ‘zero balance’ glitch and were unable to access various services during the downtime. While the Base protocol attributed the issue partially to “testing,” the reality was that nearly half of the internet experienced disruption that Monday.
Even major players in the crypto space were affected. Coinbase’s exchange services degraded significantly, and other centralized exchanges such as Crypto.com locked users out of trading and transferring their assets.
### Is AWS the Weak Link for Crypto?
Surprisingly, this outage impacted even non-custodial crypto wallets—applications that typically grant users full control over their funds. For example, MetaMask was among those crippled during the incident. According to data from Infura, a popular Ethereum infrastructure provider, several main Ethereum network APIs went offline due to the ongoing AWS outage. Infura reported:
> “The issue has reoccurred due to an ongoing AWS outage, impacting multiple Infura Mainnet JSON-RPC APIs (Ethereum, Polygon, Optimism, Arbitrum, Linea, Base, Scroll).”
### Why Are So Many Web3 Applications Dependent on AWS?
Most protocols and applications use on-demand cloud services like AWS, Google Cloud, and Oracle to manage computational resources cost-effectively. These cloud providers help reduce expenses related to server maintenance and electricity costs. However, this introduces a paradox: while blockchain protocols may be decentralized at the software or consensus level, their underlying physical infrastructure remains centralized and vulnerable to single points of failure.
As the AWS outage persisted, so did the downtime experienced by a majority of Web3 applications and protocols. This sparked criticism on social media, with users highlighting the contradiction in decentralized claims. One user remarked:
> “So AWS went down, and half of crypto just stopped working. Decentralization vibes are off the charts today.”
### Impact on the Market
By the time AWS resolved the issue and services came back online, the outage had already disrupted market recovery. Bitcoin (BTC) had briefly surged past $110,000 before retracing immediately as the outage affected crypto exchange operations. Such downtime on centralized exchanges often leads to sell-offs and market instability, similar to previous flash crashes.
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### Final Thoughts
The AWS outage highlighted the critical dependency many crypto applications have on centralized cloud providers. Whether this incident motivates the sector to explore truly decentralized infrastructure alternatives, such as Web3-focused cloud providers like Akash Network, remains to be seen. For now, the event serves as a stark reminder that decentralization is not yet fully realized across the Web3 ecosystem.
https://ambcrypto.com/aws-outage-triggers-zero-balance-glitch-on-base-web3s-fragility-exposed
