On the morning of October 20, 2025, Amazon Web Services (AWS) experienced a major outage that caused widespread service disruptions across thousands of websites and applications.
Several large exchanges and crypto service providers rely heavily on cloud infrastructure such as AWS to power their trading platforms, wallets, analytical tools, and matching engines.
The ripple effect also affected the world of cryptocurrencies. Coinbase reported that both its trading platform and base layer 2 network were down. ConsenSys’ Infura and Robinhood were similarly impaired.
Almost immediately, the crypto community took to social media to warn that some of the industry’s most prominent companies were relying too much on centralized infrastructure.
“If the blockchain goes down because of an AWS outage, it’s not decentralized enough,” Ben Schiller, head of communications at Miden and former CoinDesk editor, said of X.
Maggie Love, the creator of SheFi, echoed that idea in X. “If we can’t connect to Ethereum’s mainnet when AWS goes down, we’re not decentralized.”
This wasn’t the first time the cloud giant caused tremors across the crypto industry. In April 2025, AWS experienced another major disruption that took several cryptocurrency exchanges and infrastructure providers offline.
Meanwhile, infrastructure provider Infura, which provides backend JSON-RPC and WebSocket APIs to help wallets and apps connect to the blockchain, shared on Monday that an outage disrupted multiple network endpoints. “Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base, and Scroll” were all affected by “recurrent issues related to ongoing AWS outages.”
With Infura support broken, front-end access for many applications stopped. Although the decentralized consensus layer remained intact, the gateway through which most users interact with the blockchain went offline, adding to the chaos.
For Layer 2 networks like Polygon, Arbitrum, Optimism, Linea, Scroll, and Base, this incident revealed a central irony. Although these systems are designed to decentralize execution and scale, many of the front ends, onboarding systems, infrastructure gateways, and API layers still rely on centralized cloud services. The outage highlights continued tensions within cryptocurrencies. Protocols that promote decentralization often still rely on centralized infrastructure for critical operations. Even when blockchain nodes are distributed, the trading engines, custody platforms, and relayers that connect users typically run on a few major cloud providers, creating a single point of failure.
“The AWS outage is yet another reminder that blockchain, and indeed the Internet itself, is only as decentralized as the infrastructure it runs on,” said Chris Jenkins, director of infrastructure operations at Pocket Network, a permissionless open data network.
Others emphasized that true decentralization requires building and operating a layer 1 blockchain itself.
“When AWS goes down, so does the base, which is literally the whole argument in favor of an EVM L1 like Sei,” said Jay Jog, co-founder of Sei Labs. “True decentralization is about resiliency. Ethereum is decentralized. Sei is decentralized. Most of L2 is not decentralized, and a large enough Web2 outage could cripple it.”
Its resilience has been demonstrated before. Major Layer 1 networks such as Bitcoin, Ethereum, and Solana continued to generate blocks and process transactions during the outage thanks to globally distributed validator sets and independent node operators that are not tied to a single provider. However, some projects choose to scale via the Layer 2 route, sacrificing these decentralization points in favor of faster throughput and cheaper transaction fees.
Efforts to decentralize backend infrastructure continue to gain urgency as the industry assesses its impact. However, it is difficult to judge whether this will stick this time as well. The April incident raised similar warnings about over-reliance on centralized providers, but this outage, six months later, shows that not much has changed.
“The Internet was designed with the idea in mind that millions of people would independently connect to the Internet and share data in that way. But now that major centralized services have become the de facto choice for infrastructure, every new app 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 Services issues
