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Solana News Update: Centralized Vulnerabilities in DeFi—Cloud Service Failures Challenge Decentralization Claims

Solana News Update: Centralized Vulnerabilities in DeFi—Cloud Service Failures Challenge Decentralization Claims

Bitget-RWA2025/10/31 14:38
By: Bitget-RWA
- Recent cloud outages exposed DeFi's reliance on centralized infrastructure, undermining decentralization promises. - AWS and Azure outages in October 2025 disrupted DeFi apps, highlighting systemic vulnerabilities. - DeFi platforms depend on centralized APIs and tools, creating single points of failure during outages. - AI integration in cloud services centralizes computational power, increasing DeFi's fragility. - Hybrid blockchain ecosystems remain vulnerable as critical components like wallets are cen

The contradiction at the heart of Web3 decentralization has become apparent once again, as recent disruptions in cloud services have highlighted weaknesses in decentralized finance (DeFi) platforms. Although blockchain technology is built on a distributed framework, decentralized applications (dApps) continue to be at risk when centralized cloud providers experience issues, casting doubt on the sector’s actual robustness, according to a report by

.

This concern was brought into sharp focus in October 2025, when

Web Services (AWS), the leading cloud service provider, suffered a major outage that lasted several hours and disrupted a wide range of services. The event, which impacted everything from online shopping to essential infrastructure, revealed just how much even blockchain-based platforms depend on centralized backend systems. AWS CEO Andy Jassy explained that the outage resulted from a configuration error, but also highlighted the company’s ambitious plans to expand, aiming to double its cloud capacity by 2027 to keep up with growing AI-related demand, as detailed by . Around the same time, Microsoft’s Azure also experienced a significant outage, further exposing the vulnerabilities within the cloud sector, as noted by .

Solana News Update: Centralized Vulnerabilities in DeFi—Cloud Service Failures Challenge Decentralization Claims image 0

Despite being designed to function without intermediaries, DeFi systems are still exposed to these types of risks. Research from 1kx.capital showed that DeFi and blockchain applications generated $6.1 billion in on-chain fees during the first half of 2025—a 113% increase from the previous year—but these platforms still rely significantly on centralized infrastructure for their operations, as reported by

. For example, platforms such as on and Aave’s lending services depend on APIs, data feeds, and smart contract management tools hosted in the cloud, all of which can become critical failure points during outages.

The dependence on centralized cloud providers is further intensified by the growing use of AI and machine learning in DeFi. Amazon’s recent integration of AI features like the Rufus shopping assistant into its cloud services is part of a broader shift where businesses are prioritizing technological advancement over decentralization, as highlighted by

. Likewise, AWS’s proprietary hardware, such as Trainium chips, is built to speed up AI processing but also concentrates computing resources in a limited number of data centers. As a result, DeFi applications that use these technologies inherit the same weaknesses as conventional web services.

Experts in the field point out that these challenges arise from the hybrid structure of today’s blockchain environments. While transactions on Layer 1 blockchains like

or Solana are decentralized, the supporting infrastructure for dApps—including services, node hosting, and even wallet providers—tends to remain centralized. For instance, Phantom, the most popular wallet on Solana, accounted for 30% of wallet-related fees in the first half of 2025, demonstrating that key elements of the DeFi ecosystem are still managed by centralized organizations, as noted in the BeInCrypto analysis.

Cloud service providers are well aware of these issues. Following the recent outages, both AWS and

have increased their investments in infrastructure, with Amazon forecasting an additional $2.1 billion in AWS revenue for the third quarter of 2025. However, these efforts primarily address capacity concerns, not the underlying reliance on centralized systems. As Jassy remarked, “The bottleneck may be power today, but at some point, it may move to chips,” indicating that the risks associated with scaling decentralized applications remain, as referenced by Seeking Alpha.

At present, the DeFi industry must strike a balance between utilizing centralized cloud resources for scalability and efficiency, and managing the risks of potential outages. While decentralized cloud solutions and hybrid approaches are starting to appear, their adoption is still in its early stages. Until these alternatives become more widespread, the vulnerabilities revealed by recent disruptions will continue to be a concern—serving as a reminder that decentralization alone does not fully protect systems from the weaknesses of the infrastructure they rely on.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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