On the morning of October 20, 2025, Amazon Web Services (AWS) experienced a major outage that resulted in widespread service interruptions to thousands of websites and applications.
Several large exchanges and crypto service providers rely heavily on cloud infrastructure like AWS to power their trading platforms, wallets, analytics tools, and matching engines.
The ripple effect has hit the crypto world: Coinbase reported that its trading platform and base layer 2 network had both gone down. ConsenSys’ Infura and Robinhood also suffered during the outage.
Almost immediately, the crypto community took to social media to sound the alarm that some of the industry’s most recognizable companies are too reliant on centralized infrastructure.
“If your blockchain is down because of AWS going down, you’re not decentralized enough,” Ben Schiller, head of communications at Miden and former CoinDesk editor, told X.
Maggie Love, the creator of SheFi, reiterated this sentiment on X: “If we can’t connect to the Ethereum mainnet when AWS goes down, we are not decentralized. »
This was not the first time the cloud giant caused tremors in the crypto landscape. In April 2025, AWS suffered another widespread disruption that took several crypto exchanges and infrastructure providers offline.
Meanwhile, infrastructure provider Infura, which offers back-end JSON-RPC and WebSocket APIs that help wallets and applications connect to blockchains, said on Monday that the outage disrupted several network endpoints. “Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base, and Scroll” were all affected due to a “recurring issue… related to an ongoing AWS outage.”
With Infura support impaired, front-end access to many applications is blocked. Even though distributed consensus layers have remained intact, the gateways through which most users interact with blockchains have been offline, amplifying the disruptions.
For Layer 2 networks such as Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, the incident revealed a central irony: Although these systems are designed to decentralize execution and scalability, many of their front-ends, integration systems, infrastructure gateways, and API layers still depend on centralized cloud services. The outage highlights a lingering tension within crypto protocols that champion decentralization and still often rely on centralized infrastructure for critical operations. Even though blockchain nodes are distributed, the trading engines, custody platforms, and relays that connect users to them typically run on a handful of large cloud providers, creating single points of failure.
“The AWS outage reminds us once again that blockchain, and indeed the Internet itself, is as decentralized as the infrastructure it runs on,” said Chris Jenkins, head of infrastructure operations at Pocket Network, a permissionless open data network.
Others have pointed out that true decentralization requires building and operating layer 1 blockchains themselves.
“The base drop when AWS goes down is literally the whole argument for L1 EVMs like Sei,” said Jay Jog, co-founder of Sei Labs. “True decentralization is about resilience. Ethereum is decentralized. Sei is decentralized. The vast majority of L2s are not and could be destroyed by a large enough Web2 outage.”
This resilience has already been demonstrated: major Layer 1 networks like Bitcoin, Ethereum, and Solana continued to produce blocks and process transactions during the outage, thanks to their globally distributed validator sets and independent node operators that are not tied to any single provider. But some projects have chosen to scale through Layer 2, compromising these points of decentralization to opt for faster throughput and cheaper transaction fees.
As the industry weighs the consequences, decentralization of back-end infrastructure is becoming increasingly urgent. But it’s hard to say if it will hold this time. The April incident sparked similar warnings about over-reliance on centralized providers, but six months later this outage showed little had changed.
“The Internet was designed with the idea in mind that millions of people would have their own connections to it and share data in this way, but with major centralized services becoming the de facto choice for infrastructure, every new application built using the same approach only makes the problem worse,” said Pocket Network’s Jenkins.
Read more: Binance, KuCoin and other crypto companies hit by Amazon Web Service glitch
