• Cloudflare’s outage exposed how dependent major crypto platforms remain on centralized web systems.
• Leading exchanges and DeFi apps went offline for hours, raising concerns about real decentralization.
• Analysts like Nader Dabit and Alex Svanevik said the incident highlights deep structural risks in Web3.

The latest outage of Cloudflare has led to a new discussion in the crypto community. The failure, which was the worst to happen in the company since 2019, impacted the largest exchanges, Web3 services, and DeFi platforms, and brought them down for several hours.

What began at 11:20 UTC on November 18 soon became one of the world’s interruptions on its own, demonstrating the power that even a single infrastructure provider still has on a sector that is founded on decentralization.

Cloudfare Sheds Light

Cloudflare verified the problem to be a defective feature file that was associated with its bot management system. The database permissions change resulted in entries of duplicate features, which doubled the size of the file.

After this file had been shared over the network, core systems were hitting memory capacity limits and were throwing out 5xx errors in large numbers.

MDS Cloudflare products, such as CDN services, Workers KV, Access logins, Turnstile, and dashboard authentication, entered a significant downturn until they were restored to their full capability at 17:06 UTC.

The group disqualified a cyberattack. The issue was with the performance of a ClickHouse query following permission changes.

The malfunctioning file continued to recreate itself at an interval of five minutes, which formed a path of recovery and failure that puzzled engineers and initially made them believe that there was a mass attack.

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Crypto Apps Exposed as Reliant on Centralized Web Tools

Users were unable to access blockchains, and blockchains were still functioning. Exchanges, DeFi protocols, and wallet services that relied on the routing by Cloudflare were down alongside it, casting doubt on how truly decentralized operations are.

The contradiction was pointed out with stellar precision by Eigen Labs’ Nader Dabit, who observed that the apps that were being sold as being unstoppable crashed the moment Cloudflare collapsed.

White Whale wrote that failures in AWS and now Cloudflare indicate the disconnect between the ideals of crypto and its daily systems.

The meltdown exposed the practical vulnerability of DeFi, which is that, when users are unable to log in or transact in emergencies during market volatility, the promise of twenty-four-hour access is invalid.

Although chains were good, the experience of millions of users was still that of a chain-level failure.

The outage was not considered a big threat by all. Mert, the CEO of Helius Labs, observed that Cloudflare processes traffic that the blockchain world has never seen before. He claimed that it is not a realistic comparison to compare decentralized networks with the global scale of Cloudflare.

Nevertheless, some people think that the crash should drive the industry to an upgraded infrastructure. Crypto data expert Alex Svanevik stated the outage can increase the need to deploy decentralized access layers that can tolerate failures in Web2 systems.

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