Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.
Although the markets may be down and technical indicators built upon AWS malfunctioning, fear not young degens, fundamental news and the spirit of Wagmi is abundant as ever. So, read on and discover all you need to know about the most important events of this week.
What you’re about to read is a shorter, more succinct version of the newsletter. For a comprehensive summary of DeFi’s developments over the last week, subscribe below.
AWS outage highlights the need for truly decentralized exchanges.
An Amazon Web Service outage this week produced significant cascading effects on the global supply chain and delivery industry, as well as hours-long operational disruptions to decentralized exchange dYdX and leading centralized exchanges Binance.US and Coinbase.
AWS is the world’s largest cloud service infrastructure, which provides an array of services, including network servers, storage capacities, remote computing and mobile development, to name a few.
According to data published this year by Synergy Research Group, the tech titan holds a 33% share of the cloud infrastructure market, followed by Microsoft and Google with 20% and 10%, respectively.
Details on the incident were largely undisclosed; however, it was stated on the company’s service health page that “multiple AWS APIs in the US-EAST-1 Region,” located in Northern Virginia, were experiencing connectivity issues.
In a Twitter statement shared on Tuesday, and into the early hours of Wednesday, dYdX spoke about enhanced latency across the network, as well as website loading failures, before disclosing its overreliance on the centralized servers, one of which is AWS.
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. We apologize for this outage.
— dYdX (@dydxprotocol) December 8, 2021
Analytical data from DappRadar reveals that dYdX is the 13th largest decentralized finance application built on the Ethereum Network, registering approximately $1.5 billion in daily trading volume. In September this year, dYdX achieved a historic transactional milestone in surpassing the volume of Coinbase over the course of a single day, with $4.3 billion in comparison to $3.7 billion.
Decentralization is understood by many early crypto adopters to be a core component of the industry’s architecture. Alongside security and scalability, the former makes up the so-called blockchain trilemma, a concept coined by Ethereum co-founder Vitalik Buterin, to denote the necessity to sacrifice one side of the triad to experience the benefits of the other two.
In the world of crypto exchanges, many opt to prioritize security and scalability in pursuit of mass adoption but, therefore, operate with largely centralized, Web 2.0-like…
Read More: cointelegraph.com