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The DeFi Market Has Convinced How Dangerous …

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What is DEFI? Decentralized Finance Explained (Ethereum, MakerDAO, Compound, Uniswap, Kyber)

The DeFi Market Has Convinced How Dangerous ...

The DeFi market has learned how dangerous it is to depend on one provider
CONTENT

  • Technical glitch at Infura demonstrated the risks of over-reliance on one provider.

  • This should be a useful lesson for the DeFi market..

  • The total capitalization of all protocols in the DeFi segment has again set a historic record.

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Technical failures at fintech provider Infura hit the entire Ethereum ecosystem and show how dangerous it is to rely on just one provider.

The DeFi market has seen how dangerous ...

Technical failures at fintech provider Infura affected the entire Ethereum blockchain ecosystem and a number of crypto exchanges. This became an object lesson for the decentralized finance (DeFi) segment, showing how dangerous it is to “put all your eggs in one basket.”.

Black Wednesday

November 11 was a bad day for Ethereum. On the eve of the BeInCrypto editorial staff already reported that the infrastructure provider Infura suddenly encountered technical problems when connecting to the Ethereum network. This caused a large-scale failure in the service and forced a number of cryptocurrency exchanges to suspend the withdrawal of funds in ETH and other transactions with ERC-20 tokens..

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Infura is a fintech company offering Ethereum network nodes to clients. As it soon became clear, the reason for yesterday’s problems was the update of the Ethereum network code, which was opaque and caused chaos in the ecosystem among those who did not have time to update. Among them was the Infura service..

As a result, various blockchain observers were leaking conflicting information yesterday, exacerbating the situation everywhere – including in the DeFi segmentDecentralized finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More … Some experts estimate that it took Infura more than five hours to return to normal operation..

It was important to us to share the details of today’s service outage as quickly as possible. Our team has completed their post-mortem and you can read it here https://t.co/eifVwjwOXk

The DeFi market has seen how dangerous ...

– Infura (@infura_io) November 11, 2020

All eggs in one basket

Industry expert Camila Russo of The Defiant commented on the impact of this incident on the DeFi industry, explaining why it was a painful experience for a young ecosystem..

The fact is that Infura’s clients include such prominent DeFi representatives as Uniswap, Compound Finance, MetaMask and MakerDAO. Fortunately, as a result of the incident, no tokens were lost and no security breaches occurred, but the normal functioning of protocols and crypto platforms was disrupted..

This clearly demonstrated to industry participants how dangerous it is to over-rely on only one provider. However, Russo hopes that the DeFi sector will emerge stronger from this story..

“More protocols should go to their own nodes, and use Infura services as a backup resource and technical support”.

Meanwhile, blockchain engineer David Michal has already published a list of alternative providers of Ethereum nodes..

Today’s Infura outage sent users scrambling to find an alternative RPC provider.

I just threw together https://t.co/FbrrUiGymB to be a central list of public, free RPC endpoints & their current status.

– David Mihal (@dmihal) November 11, 2020

The DeFi market has seen how dangerous ...

However, both Ethereum and the DeFi segment have shown composure in the face of this disruption. Moreover, the DeFi market has even broken its all-time record for the total value of all assets locked in DeFi protocols (TVLs) again. According to DeFi Pulse, this amount has crossed the $ 13 billion mark.

In November alone, over $ 2.5 billion was poured into DeFi protocols. The Uniswap project continued to be the leader, retaining a market share of 22.3%.

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