Crypto Exchanges Should Run Their own Ethereum Nodes – Bitfinex CTO

Ethereum Updates

Quick take:

  • Bitfinex’s CTO has suggested that crypto exchanges should run their own Ethereum nodes
  • His comments were a recommendation after Ethereum’s infrastructure provider, Infura, went offline
  • Crypto exchanges were temporarily forced to suspend ETH and ERC20 token withdrawals after a chain split occurred
  • The root cause of the Ethereum chain split has been identified as an introduction of new code without a proper consensus
  • A fix has been implemented by Infura

Bitfinex and Tether’s CTO, Paolo Ardoino, has suggested that crypto exchanges should run their own Ethereum (ETH) nodes. His recommendation was in response to news of one of Ethereum’s infrastructure providers, Infura, going offline earlier today. This event forced crypto exchanges to halt all ETH and ERC20 token withdrawals as a precautionary measure. Below is Mr. Ardoino’s tweet making the suggestion.

A Brief Chronology of the Infura Outage

Earlier today, at around 08:12 UTC, the team at Infura notified the crypto community that they were experiencing a service outage on their Ethereum Mainnet API. By 09:41 UTC, the team at Infura had identified the root cause and were working towards a solution. By 14:28 UTC, a solution had been found and implemented.

A full chronology of the events can be found on the Infura status page. The team has also promised to provide a full post-mortem as soon as possible.

Crypto Exchanges Had Halted Ethereum Withdrawals

As earlier mentioned, the outage had caused several crypto exchanges to disable ETH and ERC20 token withdrawals as a precautionary measure.

Binance CEO, Changpeng Zhao, then notified the crypto community that the Ethereum network had experienced what looked like a chain split.

There was a possible ETH chain split at block 11234873. Etherscan and Blockchair are showing two different chains and data after this block. We’re resolving now but have temporarily closed withdrawals. Funds are #SAFU.

Withdrawals of ETH and ERC20 tokens have since resumed on Binance with CZ making the announcement via the following tweet.

A Change in ETH Code Led to te Chain Split

According to the lead developer at Blockchair, Nikita Zhavoronkov, the genesis of the issue on the Etheruem network was caused by an introduction of new code that led to a chain split as some miners had not upgraded to the new iteration.

According to Mr. Zhavoronkov, a lack of consensus before the implementation of the code should be treated as a very serious issue similar to the DAO incident back in 2016. He explained his concerns as follows.

In my opinion, today’s consensus failure in #Ethereum shouldn’t be underestimated and should be considered as the most serious issue Ethereum has faced since the DAO debacle 4 years ago. An investigation is in order.

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