Uniswap has suddenly gone offline this morning after experiencing issues with its Cloudflare hosting provider. However, nothing has prevented the decentralized exchange from working as Uniswap advised its community on how to remotely access the protocol.
During the morning of November 14, a new tweet by Uniswap revealed that the app.uniswap.org website went offline. The team stated that the online platform was temporarily down due to a problem with Cloudflare, a leading internet hosting provider. The main issue was related to the IPFS gateway, a filesystem created by the company.
Uniswap used the moment to propagate the benefits of decentralization, namely due to the newly arisen issue. Furthermore, the DEX has also shared a guide of how users can run the exchange locally and trade with the AMM. The team has also stated that the community can access the DEX through third-party systems, mainly Dharma, Sia, and numerous Ethereum-based wallets. Commenting on decentralization, Uniswap stated:
When CeFi goes down, there is no way to access it. With true DeFi on @ethereum there are no central points of failure. There is no downtime.
Not the first time that decentralization becomes an issue
Today’s hosting problem has shown both the crypto and DeFi communities just how important decentralization is. While Uniswap being offline is not a major problem, it has shown an important attack vector that investors are perhaps not aware of.
As Defiye previously reported, famous investor and bitcoin enthusiast Anthony Pompliano has caused a stir in October after saying that DeFi is not decentralized.
The Morgan Creek Digital co-founder stated that most DeFi platforms could be shut down if Jeff Bezos simply decided to turn off Amazon Web Services (AWS) servers. Pompliano believes that as long as developers run protocols via centralized services, they cannot be decentralized.
While some within the community have agreed with the line of thinking, the majority of users were angered by the statement. Most investors, including developers, have commented that the tweet is not factual and that it misinforms new users. For example, Defiant news reporter Camila Russo shared sources which reveal that hosting services support 70% of all Ethereum nodes. However, she reiterates that not all nodes are hosted by the same provider. For example, Amazon only supports 37% of all ETH nodes.
In what way does decentralization truly matter?
Truth to be told, there are compelling arguments from both sides. Most protocols in the DeFi market are not even decentralized. On the other hand, those projects that are decentralized still rely on centralized services. But in this case, it is important to note that decentralization is not a binary state, but merely a spectrum.
DeFi is an entirely new market that did not have the time to mature yet. As investors start focusing more on the fundamental value we can expect truly decentralized projects to become more popular. However, we must still have in mind that, at least for now, all protocols will be centralized to some degree.
Whether we talk about the number of coins or nodes owned by a single entity, there will always remain the inherent feature of centralization and monopolies. Naturally, it is important to minimize these aspects as much as possible. But one fact remains constant, we will never be able to remove them. Therefore, we should not ask if DeFi is decentralized, we should wonder to which degree it is decentralized.