The decentralized derivatives exchange dYdX experienced an outage due to its reliance on Amazon’s centralized cloud services. Coinbase and Binance are centralized exchanges. The outage also had an impact on the United States.
The dYdX derivatives DEX reported a service outage on December 8 that it blamed on Amazon Web Services (AWS).
The team tweeted that the centralized cloud services provider was down, which caused the dYdX front end to not load:
We are experiencing increased latency across services as well as impaired functionality, with endpoints failing to function and the website failing to load.
The outage and service disruption lasted approximately 8 to 9 hours. According to its status page, the dYdX exchange was back online at the time of publication, but the incident has once again raised the question of true decentralization.
Should it be decentralized?
Is a decentralized DeFi protocol truly decentralized if it must rely on services provided by a centralized corporation?
The team acknowledged that the platform must still rely on centralized services and apologized for the outage.
Unfortunately, some aspects of the exchange continue to rely on centralized services (AWS in this case). We are deeply committed to fully decentralizing, and this will continue to be one of our top priorities as we iterate on the protocol.
Several responses suggested that the team run the exchange on more decentralized cloud services, but they, too, are susceptible to technical issues and outages.
At the time of publication, the AWS service status dashboard was still reporting some issues with systems in the US-EAST-1 region.
According to mainstream media, the outage also caused issues in Amazon’s own warehouses. A slew of major websites, streaming services like Netflix and Disney+, Alexa, delivery services, and government services were also impacted. Coinbase and Binance, both of which offer their own cloud services. According to reports, the United States also experienced a power outage.
According to Statista, AWS controls roughly one-third of the global market for cloud infrastructure services. Too much reliance on a single centralized service provider is not a good idea, as many have recently discovered.
DYDX makes a comeback
During the outage, the exchange’s native token fell to $8.80, but quickly recovered when services were restored.
According to CoinGecko, DYDX was trading up 2.2 percent on the day at $9.33 at the time of writing. However, the token has suffered as a result of the broader market decline, falling 26 percent in the last week. DYDX is currently down 66.5 percent from its all-time high of $27.86 on September 30.