The Ethereum network bounced back after facing two performance issues within 24 hours that led to blocks not being finalized. According to a tweet by pseudonymous Ethereum developer Terence.eth, the network resumed finalizing blocks, and clients are releasing updates to tackle the problem. This quick recovery is good news for the Ethereum ecosystem, but it also raises some eyebrows regarding network reliability.
Finalized blocks are crucial for proof-of-work validation, which makes networks like Ethereum trustworthy and dependable. In Ethereum, finality takes around 15 minutes, and its assurance means a block can’t be altered or removed from the blockchain without burning at least 33% of the total staked ETH, as per the Ethereum Foundation.
While the network managed to overcome these technical challenges and continue operating effectively, it raises questions about Ethereum’s reliability, especially for builders relying on the platform. A stable, reliable network is vital for blockchains seeking to attract users and capital, and Ethereum has previously enjoyed a reputation as one of the most stable networks in the market.
Some services built on the Ethereum network, such as DYdX, a leading crypto exchange platform, had to temporarily halt deposits due to Ethereum’s lack of finality. In response to the incidents, Superphiz.eth, an Ethereum Beacon Chain community health consultant, tweeted that a third wave might be on the horizon. The consultant suggested validators enhance their hardware specs, switch to minority clients, and apply patches when available but added, “As bad as this looks, the chain keeps going and eventually finalizes.”
With over $27 billion in Total Value Locked (TVL) across the Ethereum network, according to data from DefiLlama, Ethereum has become a crucial element in the blockchain ecosystem, hosting various networks for financial infrastructure and other applications. Among these, Lido Finance, with more than $12 billion in TVL, makes up a significant portion, followed by MakerDAO, AAVE, and Curve Finance.
However, given recent events, long-standing concerns regarding network reliability are beginning to resurface. Despite Ethereum’s swift recovery and continued effective operation, the incidents serve as a reminder that no system is immune to potential issues. As Ethereum’s native token ETH trades at around $1,800, with a 2.0% increase over the past day and a 7% decrease over the past week, these concerns may affect market confidence and, consequently, the token’s performance down the line.
Source: Cryptonews
