AWS outage hits dYdX, raising concerns over its decentralization

An Amazon Web Service (AWS) outage on Tuesday forced the decentralized exchange dYdX (DYDX) to halt operations, raising questions over the reliance on centralized services by DeFi protocols. 

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

dYdX issued an update via Twitter on Wednesday, acknowledging that its reliance on a centralized web service like AWS is problematic. It pledged to improve the true decentralization of its operations but did not state how.

“Unfortunately, there are still some parts of the exchange that rely on centralized services (AWS in this case). We are deeply committed to fully decentralizing and this remains one of our top priorities as we continue to iterate on the protocol.”

Centralized exchanges (CEX) Binance.US and Coinbase also saw service outages due to the AWS issue.

dYdX is the eleventh biggest DeFi app on the Ethereum network, according to Dappradar. It does about $1.5 billion in daily trading volume. As a decentralized exchange (DEX), it doesn’t have a know-your-customer (KYC) protocol and settles all transactions via smart contracts.

Updates on the dYdX status portal showed that while trying to remedy the problem, the team was unable to access key elements of its back end due to the outage. The status from 9:20 pm UTC read:

“We are looking into whether we can just have all of those orders cancel, however the AWS outage is preventing us from currently being sure if that’s possible.”

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DYDX token is down about 10% over the past 24 hours, trading at $8.63, according to Coingecko.