AWS experiences two outages in a single month, sounding the alarm: The hidden centralization risks of Web3 are highlighted, how should users respond?

Amazon Web Services (AWS) experienced a widespread outage for the second time in October, highlighting the hidden centralization risks within the Web3 ecosystem. Although blockchain networks like Ethereum remain decentralized in nature, the majority of access layers (such as RPC nodes, wallet services, and DeFi platform APIs) heavily rely on a few centralized cloud services like AWS US-East-1. Experts warn that this “edge centralization” is the largest systemic vulnerability in the encryption space, potentially preventing users from trading, confirming, or accessing their digital assets during an outage, severely impacting transaction continuity.

The “Centralization Paradox” of Web3 Infrastructure

Although decentralization is a core principle of Blockchain, the key technology stack of Web3 largely relies on a few centralized cloud service providers, especially AWS.

• The core role of AWS: Most critical infrastructure, including RPC endpoints (such as Infura, Alchemy, QuickNode), APIs, exchange front-ends, analytics dashboards, and even wallet services, run on centralized cloud providers like AWS US-East-1.
• Access Blocked: When AWS experiences a failure, it does not affect the blockchain itself (on-chain assets remain secure), but it disrupts the user's access to the blockchain. For everyday users, this access blockage is almost indistinguishable from a “blockchain outage,” resulting in a “bottleneck” in user experience.

During the first outage on October 20, MetaMask and Uniswap users experienced connection failures, and the NFT market and data oracles also faced delayed updates. Some DeFi protocols were unable to access price feeds or complete smart contract calls due to middleware APIs running on AWS being inaccessible.

Risk Distinction of Asset Security and Transaction Continuity

The risks brought by AWS downtime need to be treated differently:

Experts describe this as “a decentralized house with only a centralized door lock”—once the key service goes offline, even if the house itself is solid, it cannot be accessed. This vulnerability of “edge centralization” is one of the biggest systemic risks in the DeFi space.

Impact on the Future Development of the Encryption Market

AWS-level interruptions, if coinciding with peak on-chain activity (such as Bitcoin halving or ETF-driven bull markets), will have more severe consequences. Users may face issues such as wallet freezing, transaction delays, or liquidity pool suspensions.

• Historical lessons: The two AWS outages in 2021 and 2025 impacted the NFT market, wallet APIs, and multiple trading platforms, proving that this is not a hypothetical risk.
• Solution Recommendation: To ensure the long-term stability of DeFi, industry experts urge the adoption of a multi-cloud redundancy strategy and the active development and deployment of decentralized RPC solutions.

However, it should be clarified that although the AWS outage has exposed the depth of centralization in the encryption ecosystem and posed a real systemic risk to crypto access, it has not yet affected the underlying security of the assets.

How Encrypted Users Should Respond

The Web3 ecosystem's excessive reliance on centralized infrastructure like Amazon Web Services (AWS) is indeed a major irony and potential risk to its decentralization vision. To address this issue, specific measures can be taken from the short-term, medium-term, and long-term perspectives.

Short-term solution: increase redundancy and diversity

• Deployment across multiple cloud regions and providers: The core is to avoid single points of failure. When deploying services, it is essential not only to distribute them across multiple Availability Zones (AZs) in AWS but also to use multiple cloud service providers, such as Microsoft Azure or Google Cloud (GCP). This way, even if a specific region of a cloud provider encounters issues, the services can continue to operate in other regions or providers.
• Implement Automatic Failover: Use Domain Name System (DNS) and load balancers to automatically route traffic from faulty areas to normally operating areas. This can ensure that failures can be isolated and bypassed within seconds.
• Diverse RPC (Remote Procedure Call) Stack: For services that need to interact with the Blockchain, multiple RPC providers should be configured, such as Pocket, Lava, Ankr, or Chainstack. This can prevent service interruption in case one provider goes down.
• Separate Read and Write Paths: Separate the traffic responsible for transaction ordering from the public RPC call traffic to ensure that critical transaction execution is not affected by the load of ordinary queries.

Mid-term solution: adopt hybrid infrastructure

• Hybrid Deployment: For critical consensus nodes and signing nodes, deploy them on physical servers (Bare-metal) or host them in your own data center. For elastic tasks, such as data indexing or analysis, public cloud services can continue to be used.
• Not entirely reliant on cloud providers: This means that in architectural design, cloud service providers should be viewed as a resource source, rather than the only source of trust. Even if access to the cloud provider's console is unavailable, core operations (such as multi-signature) should have an offline backup path.
• Infrastructure as Code: By using IaC (Infrastructure as Code) tools, seamless deployment and switching across cloud service providers can be achieved. When a cloud service provider encounters issues, the entire infrastructure stack can be quickly migrated to another provider.

Long-term solution: Fully embrace Decentralization infrastructure

• DePIN (Decentralized Physical Infrastructure Network): This type of project aims to build decentralized computing, storage, and bandwidth networks by utilizing globally idle hardware resources through token incentives.
  • Decentralized Computing: Projects like Akash and Fluence aggregate global computing resources through the network, providing developers with decentralized computing services, becoming strong competitors to AWS.
  • Decentralized Storage: Projects like Filecoin, Arweave, and Sia provide distributed, censorship-resistant data storage solutions. Data is encrypted and distributed across numerous nodes, ensuring permanent storage and data sovereignty.
• Infrastructure DAO: Develop community-operated Infrastructure DAOs (Decentralized Autonomous Organizations), such as RPC services or transaction ordering markets. These DAOs ensure the decentralization and high availability of services through on-chain performance verification and reward mechanisms.
• Gradual “De-clouding”: With the development of the DePIN ecosystem, Web3 infrastructure will gradually reduce its reliance on centralized cloud services, deploying nodes on millions of independent hardware devices worldwide, thereby completely eliminating single points of failure.

Conclusion

AWS experienced outages twice in one month, sounding an urgent alarm for the entire Web3 community. It clearly reveals the fatal dependence of decentralized systems on a few centralized infrastructures. To achieve true decentralization, the encryption industry must immediately address the deep-seated issue of “access layer centralization.” In the future, the deployment of multi-cloud strategies and decentralized network infrastructure will be key to ensuring that the Web3 ecosystem remains resilient and maintains transaction continuity in the face of centralized failures.