AWS outage hits dYdX, raises concerns about decentralization

On Dec. 7, an Amazon Web Services (AWS) outage forced decentralized exchange dYdX to cease operations, raising questions about DeFi protocols’ reliance on centralized services.

AWS is one of the most widely used cloud services in the world, and a considerable amount of decentralized infrastructure uses it. AWS provides security for servers, storage, networking, remote computing, email, mobile development, and websites.

dYdX issued an update via Twitter on Dec. 8, acknowledging that its reliance on centralized web services like AWS is problematic. It promised to improve the true decentralization of its business, but did not say how.

“Unfortunately, some parts of the exchange still rely on centralized services (AWS in this case). We are firmly committed to full decentralization, and this remains one of our top priorities as we continue to iterate on the protocol. "

Centralized exchanges Binance.US and Coinbase also experienced service outages due to AWS issues.

According to Dappradar, dYdX is the 11th largest DeFi application on the Ethereum network. Its daily trading volume is about $1.5 billion. As a decentralized exchange (DEX), it requires no know-your-customer (KYC) protocols and settles all trades through smart contracts.

An update on the dydx status portal revealed that while trying to remedy the issue, the team was unable to access key elements of its backend due to a glitch. The status at 9:20 PM UTC is this:

"We are investigating whether we can simply have all of these orders cancelled, however the AWS outage prevents us from determining at this time whether this is feasible."

The dYdX token is down about 10 percent over the past 24 hours, trading at $8.63, according to data from Coingecko.