The 15-hour Amazon Web Services (AWS) outage that affected major crypto and fintech platforms, such as Coinbase, Robinhood, MetaMask, and Venmo, has reignited discussions on the decentralization of Web3.
While blockchains continued to function, countless users found themselves unable to use wallets, exchanges, and decentralized applications (DApps) due to interfaces and application programming interfaces (APIs) hosted on centralized servers.
“Decentralization has succeeded at the ledger layer but not yet at the infrastructure layer,” Jamie Elkaleh, Chief Marketing Officer at Bitget Wallet, stated. “Real resilience depends on diversifying beyond hyperscalers into community-driven and distributed networks.”
Elkaleh noted that achieving full decentralization “isn’t yet feasible at scale” because many teams depend on hyperscalers like AWS, Google Cloud, and Azure for compliance and reliability. He recommends pursuing a “credible multi-home” infrastructure that balances workloads across cloud and decentralized networks to mitigate single points of failure.
Furthermore, Elkaleh argued that cloud providers deliver scalability and security but come with concentration risks. “If one region or provider fails, it impacts hundreds of applications,” he explained. Hybrid systems, combining cloud solutions with decentralized storage and community-operated nodes, represent the logical progression.
Users Locked Out of Functioning Blockchains
Anthurine Xiang, co-founder of EthStorage and QuarkChain, remarked that the outage demonstrated how “even in Web3, many services still depend heavily on centralized infrastructure.” She emphasized that true decentralization involves redesigning every layer of services to prevent reliance on any single provider.
“It’s like the house is fine, but the door is jammed,” Xiang said, illustrating how users were unable to access functioning blockchains during the outage.
The outage, which started on Monday and lasted approximately 15 hours, resulted in Coinbase’s app crashing, hindering user access and transactions. Robinhood traders reported delays, and MetaMask users experienced zero balances in their wallets due to the service that retrieves balance data being offline.
Jawad Ashraf, CEO of Vanar Blockchain, criticized the crypto sector for mostly relying on the same service providers, asserting that around 70% of Ethereum nodes are hosted on AWS, Google, or Microsoft. “We’re just paying three different landlords instead of one,” he said.
He added that while building entirely decentralized systems is achievable, “most teams won’t pursue it anytime soon” due to the complexity and slower process compared to setting up on AWS.
A Call to Action
Elkaleh advocates for increased investment in decentralized cloud, storage, and compute networks like Akash, Filecoin, Arweave, and others. He urges Web3 developers to adopt hybrid models that combine the best of traditional reliability with distributed redundancy.
“Each significant outage serves as a wake-up call,” Elkaleh said. “The trajectory of Web3 will be determined more by the distribution of its infrastructure than by the decentralization of its tokens.”
