On the morning of October 20, 2025, Amazon Web Services (AWS) experienced a major outage that spilled into widespread service disruptions across thousands of websites and applications.
Several major 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 hit the crypto world: Coinbase reported that its trading platform and its Base Layer-2 network both went down. ConsenSys’ Infura and Robinhood similarly 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 dependent on centralized infrastructure.
“If your blockchain is down because of the AWS outage, you’re not decentralized enough,” said Ben Schiller, head of communications at Miden and a former CoinDesk editor, at X.
Maggie Love, the creator of SheFi, echoed this sentiment on X: “If we can’t connect to the ethereum mainnet when AWS goes down, we’re not decentralized.”
This wasn’t the first time the cloud giant caused tremors in the crypto landscape. In April 2025, AWS suffered another widespread disruption that knocked several crypto exchanges and infrastructure providers offline.
Meanwhile, infrastructure provider Infura, which offers backend JSON-RPC and WebSocket APIs that help wallets and apps connect to blockchains, shared 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’s support weakened, front-end access to many applications came to a standstill. Although the distributed consensus layers remained intact, the gateways through which most users interact with blockchains went offline, compounding the disruption.
For Layer 2 networks like Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, the incident revealed a central irony: Although these systems are designed to decentralize execution and scale, many of their front-ends, onboarding systems, infrastructure gateways, and API layers still depend on centralized cloud services. The outage underscores an ongoing tension within crypto — protocols that champion decentralization still often rely on centralized infrastructure for critical operations. Although blockchain nodes are distributed, the trading engines, custodian 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 yet again that the blockchain, and indeed the Internet itself, is only as decentralized as the infrastructure it runs on,” said Chris Jenkins, head of infrastructure operations at Pocket Network, a permissionless open data network.
Others emphasized that true decentralization requires building and operating on layer-1 blockchains themselves.
“Basis dropping when AWS goes down is literally the entire argument in favor of EVM L1s 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 can be bricked by a large enough Web2 outage.”
This resilience has been demonstrated before: major layer-1 networks like Bitcoin, Ethereum, and Solana have continued to produce blocks and process transactions during the outage, thanks to their globally distributed set of validators and independent node operators that are not tied to any single provider. But some projects have chosen to scale via the layer-2 route, compromising these points of decentralization in favor of faster throughput and cheaper transaction fees.
As the industry assesses the fallout, the push to decentralize the backend infrastructure becomes increasingly urgent. But whether it will last this time is hard to say. The April incident prompted similar warnings about over-reliance on centralized providers, but six months later this outage showed that not much had changed.
“The Internet was designed with the idea that millions of people would run their own connections to it and share data that way, but with large centralized services becoming the de facto choice for infrastructure, every new app built with the same approach only makes the problem worse,” said Pocket Network’s Jenkins.
Read more: Binance, KuCoin and other crypto firms hit by Amazon Web Service Issue
