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Gitumani Talukdar
Dec 10, 2021
by Gitumani Talukdar

AWS Outage Affects dYdX, Causing Decentralisation Concerns

AWS Dydx Concerns
On December 7, the decentralized exchange dYdX was forced to shut down due to an Amazon Web Service (AWS) failure, raising concerns about DeFi protocols' dependency on centralized services. Traders had no choice but to wait on Dec. 7 when dYdX, Binance.US, and Coinbase all went down owing to an AWS issue.

AWS Outage Affects dYdX Amid Centralization Concerns

AWS is one of the world's most popular cloud services, with a significant proportion of decentralized infrastructure using it. Servers, storage, networking, remote computing, email, mobile development, and website security are all available via AWS.

On December 8, dYdX posted a Twitter update, admitting that their dependence on a centralized web service like AWS is problematic. It said that it would increase actual decentralization of operations, but did not specify how.

"Unfortunately, several aspects of the exchange continue to depend on centralized services" (AWS in this case). We are dedicated to completely decentralizing the protocol, and it remains one of our top goals as we iterate on it."

Disrupted Service in the US

Due to the AWS outage, service was also disrupted in the United States and on Coinbase. According to Dappradar, dYdX is the 11th most popular DeFi app on the Ethereum Network. 

It has a daily trading volume of roughly $1.5 billion. It does not need a know-your-customer (KYC) protocol and settles all transactions using smart contracts as a decentralized exchange (DEX).

According to updates on the dydx status site, the team was unable to access crucial aspects of its back end owing to the outage while attempting to resolve the issue. At 9:20 p.m. UTC, they updated that they are investigating if they can just cancel all of those purchases, but the AWS outage is preventing them from doing so. 

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AWS Outage Affects dYdX, Causing Decentralisation Concerns
Gitumani Talukdar
Gitumani is a blockchain enthusiast as she keeps a tab on the recent happenings pertaining to the crypto industry. She aims to provide quality content in blockchain and crypto domain. She is a financial content writer too and has worked on several financial projects related to the stock market news, fundamental research, and technical analysis for several websites.

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