Decentralization Critics Raise Brows as Base Network Suffers from AWS Outage

Coinbase’s layer-2 blockchain, Base, was among the blockchain networks that took a hit as the cloud computing provider, Amazon Web Services (AWS), experienced a widespread outage.

The downtime, which lasted for hours, affected several crypto platforms, including Coinbase and Infura. It also affected non-crypto companies like HMRC, Zoom, and Snapchat.

This incident has sparked debates over the decentralized nature of crypto-based projects.

Debate Over True Decentralization

Earlier today, AWS began experiencing a significant disruption to its infrastructure. Shortly after, various companies started failing. Coinbase, for instance, reported that its platform is down. Within an hour, Base’s official status page disclosed that it suffered a similar disruption due to the AWS outage.

This is not the first time crypto exchanges will experience sudden outages due to the AWS failure. In April, leading crypto custodians like Binance, KuCoin, and MEXC reported downtimes due to the AWS interruption.

These occurrences put together have led many to question why crypto platforms, especially blockchains, should be going offline because of a single cloud computing provider’s failure.

AWS plays a critical role in powering much of the internet, hosting data and services for thousands of companies. However, when AWS experiences a problem, the ripple effect can reach industries including blockchain.

One of the blockchain’s selling points is its decentralization. This means that, unlike a centralized entity, it is not dependent on a single authority. But, due to the latest events, onlookers have debated that the crypto industry runs on AWS. Some have even gone further to create memes out of the claim.

Solana Foundation’s president, Lily Liu, tweeted that “Amazon doesn’t need to launch its own chain” because it is a layer-1 blockchain of its own. According to her, AWS powers half of the crypto industry.

In the past, Bitget’s CEO, Gracy Chen, has hinted that decentralized cloud services are a possible solution to free blockchain projects from such backlash and outages.

More Causes of Blockchain Outages

On the part of Base, its design makes it heavily dependent on Coinbase.

Unlike Bitcoin, which has impressively maintained uptime for more than a decade, Base depends largely on Coinbase’s internal setup and a single sequencer that operates on centralized servers. This design leaves it vulnerable, meaning that if Coinbase or AWS runs into problems, the entire Base network can experience delays or even halt activity until everything returns to normal.

Meanwhile, other blockchain platforms have reported outages for reasons unrelated to the AWS fiasco. For instance, the XRP Ledger (XRPL) faced an unexpected disruption in February when block production stopped for nearly an hour. It caused a brief pause in network operations.

Thankfully, the issue was fixed shortly after, and the system returned to normal without any loss of funds or transactions, according to updates from the XRPL development team.

Another example is Solana, which repeatedly faced network outages in the past few years due to network congestion.

Sui, The Open Network (TON), and Avanlanche’s C-Chain have also experienced downtime, among others. In most cases, though, these outages are fixed within a few hours. While this can be applauded, it also pinpoints a shortcoming on the part of blockchain projects.

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