The recent Amazon Web Services (AWS) outage affected significant crypto and fintech platforms such as Coinbase, Robinhood, MetaMask, and Venmo, raising questions about the true decentralization of Web3.

Despite blockchain operations running seamlessly, many users faced accessibility issues with wallets and exchanges due to centralized server dependencies for their front-end interfaces and APIs.

“Decentralization has succeeded at the ledger layer but not yet at the infrastructure layer,” said Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet.
“Real resilience depends on diversifying beyond hyperscalers into community-driven and distributed networks.”

Elkaleh emphasized that achieving full decentralization is not yet practical at scale, as most companies depend on hyperscalers like AWS, Google Cloud, and Azure for compliance, performance, and reliability. He suggested that the essential aim should be a credible multi-home infrastructure, distributing workloads over both cloud and decentralized systems to eliminate single points of failure.

He acknowledged the scalability and security cloud providers offer but cautioned against the concentration risk: “If one region or provider goes down, hundreds of apps are affected.”

Hybrid systems that integrate cloud and decentralized solutions could provide the needed resilience.

X user poking fun at so-called decentralized platforms. Source: Kunal Gandhi

Related: Amazon AWS Outage Hits Coinbase Mobile App, Robinhood

Users Were Locked Out of Functional Blockchains

Anthurine Xiang, Co-Founder at EthStorage and QuarkChain, remarked that the outage showcased the centralized dependencies many Web3 services still have.

She stated that for true decentralization, every layer—from storage to access—needs to be redesigned, preventing any single provider from disabling the systems. “It’s like the house is fine, but the door is jammed,” Xiang noted.

This outage, which endured approximately 15 hours, disrupted Coinbase’s app and Base network, blocking user access and transactions, while Robinhood reported delays and API malfunctions. MetaMask users observed zero balances in their wallets, although their assets remained safe, as the service needed for balance retrieval was down.

Jawad Ashraf, CEO of Vanar Blockchain, criticized the crypto industry for relying on the same service providers: “About 70% of Ethereum nodes are hosted by AWS, Google, or Microsoft. We’re just paying three different landlords instead of one.”

He mentioned that fostering entirely decentralized systems is feasible, but many development teams won’t pursue it soon due to the increased complexity and slower pace compared to AWS.

Solana claims no throughput impact from the outage. Source: Solana

A Wake-Up Call

Elkaleh expressed that this outage should prompt accelerated investments in decentralized cloud, storage, and computing networks such as Akash, Filecoin, Arweave, and more. He urged Web3 developers to adopt hybrid models that balance traditional reliability with distributed redundancy.

“Every major outage is a wake-up call,” he stated.
“The future of Web3 won’t be defined by how decentralized the tokens are, but by how distributed the infrastructure truly becomes.”