On the morning of October 20, 2025, Amazon Web Services (AWS) experienced a major outage, causing widespread service outages across 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, analysis tools, and comparison engines.
The domino effect hit the cryptocurrency world: Coinbase reported that its trading platform and base layer 2 network went down. Infura and ConsenSys’ Robinhood suffered similarly during the outage.
Almost immediately, the crypto community took to social media to sound the alarm that some of the industry’s most well-known companies are overly reliant on centralized infrastructure.
“If your blockchain is down because of an AWS outage, you are not decentralized enough,” said Ben Schiller, head of communications at Miden and former CoinDesk editor, on X.
Maggie Love, creator of SheFi, reiterated that sentiment about X: “If we can’t connect to the Ethereum mainnet when AWS goes down, we’re not decentralized.”
This was not the first time the cloud giant sent tremors through the crypto landscape. In April 2025, AWS suffered another widespread outage that took several crypto exchanges and infrastructure providers offline.
Meanwhile, infrastructure provider Infura, which offers backend JSON-RPC and WebSocket APIs that help wallets and applications connect to blockchains, shared on Monday that the outage disrupted multiple network endpoints. “Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base and Scroll” were affected due to a “recurring issue… related to a rolling AWS outage.”
As Infura support was affected, front-end access to many applications stopped. Although the distributed consensus layers remained intact, the gateways through which most users interact with blockchains went offline, amplifying the disruption.
For Layer 2 networks like Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, the incident exposed 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 rely on centralized cloud services. The outage underscores a persistent tension within cryptocurrencies: Protocols that champion decentralization still often rely on centralized infrastructure for critical operations. Even if blockchain nodes are distributed, the trading engines, escrow platforms, and relays that connect users to them typically run on a handful of major cloud providers, creating single points of failure.
“The AWS outage reminds us once again that blockchain, and really the Internet itself, is as decentralized as the infrastructure it runs on,” said Chris Jenkins, infrastructure operations lead at Pocket Network, a permissionless open data network.
Others emphasized that true decentralization requires building and operating on Layer 1 blockchains themselves.
“Basis crashing when AWS goes down is literally the entire 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 blocked by a big enough Web2 outage.”
That resilience has been demonstrated before: Major Layer 1 networks like Bitcoin, Ethereum, and Solana continued to produce blocks and process transactions during the outage, thanks to their sets of globally distributed 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 those decentralization points to opt for faster performance and cheaper transaction fees.
As the industry assesses the consequences, the push to decentralize backend infrastructure continues to gain urgency. But it’s hard to say whether this time it will stick. The April incident sparked similar warnings about overreliance on centralized providers, but six months later this outage showed that not much had changed.
“The Internet was designed with the idea in mind that millions of people would use their own connections and share data that way, but with major centralized services becoming the de facto choice for infrastructure, every new application created using the same approach only makes the problem worse,” Pocket Network’s Jenkins said.
Read More: Binance, KuCoin, and Other Crypto Firms Hit by Amazon Web Service Issue
