Why Centralized Cloud Providers Are a Liability for Network States

Centralized cloud providers are your direct competitors. AWS, Google Cloud, and Microsoft Azure operate their own blockchain services and partner with direct protocol rivals, creating an inherent conflict of interest.

Network sovereignty is forfeited when a decentralized protocol's core infrastructure runs on a centralized platform. The provider controls the physical hardware, network paths, and can enforce arbitrary compliance rules.

Single points of failure are reintroduced. A regional AWS outage can cripple a globally distributed L2 like Arbitrum or Optimism, as seen in past incidents, proving the decentralization is a facade.

Evidence: The 2021 AWS us-east-1 outage took down dYdX, Metamask's Infura, and crippled access to major chains, demonstrating systemic risk across the entire ecosystem built on rented infrastructure.

Centralized clouds create systemic risk. A single provider's outage can cascade across the entire ecosystem, as seen when Solana validators on AWS us-east-1 failed, halting the network. This concentration violates the core blockchain principle of fault tolerance through distribution.

Cloud providers are political actors. They can and do de-platform projects based on opaque terms of service, as Infura did with Tornado Cash. A network state's sovereignty is illusory if its foundational infrastructure is subject to corporate or state censorship.

The cost model is misaligned. Cloud pricing extracts rent for commoditized compute, while decentralized networks like Akash Network and Filecoin monetize underutilized global capacity. This creates a more resilient and economically sustainable physical base layer.

Evidence: The 2021 AWS outage took down dApps across chains, including DEXs and NFT platforms, proving reliance on a centralized stack is a protocol-level vulnerability. True sovereignty requires a sovereign stack.

Centralized cloud infrastructure is the industry's universal single point of failure. Over 60% of Ethereum nodes and the majority of L2 sequencers like Arbitrum and Optimism run on Amazon Web Services (AWS). This concentration creates a systemic risk where a regional AWS outage can cripple the entire ecosystem's liveness, proving the network's resilience is a facade.

Geopolitical and regulatory capture becomes trivial. A government can pressure a single entity like Google Cloud or Microsoft Azure to censor or shut down validator clusters, bypassing the need to attack thousands of distributed nodes. The network's sovereignty is outsourced to corporations whose interests are not aligned with censorship resistance.

The cost of decentralization is being paid for centralization. Projects spend millions on redundant cloud architectures across AWS, GCP, and Azure, but this merely diversifies reliance within the same centralized model. True resilience requires a shift to permissionless, physical infrastructure, moving beyond the cloud oligopoly's control.

Technical Centralization is a Kill Switch. A single AWS region outage can halt an entire blockchain's sequencer or RPC layer, as seen with Solana and Avalanche. This violates the Byzantine Fault Tolerance promise of decentralized networks.

Political Jurisdiction is a Weapon. Cloud providers operate under national laws, creating a censorship vector. A government order can compel AWS to de-platform a network, as theorized with Tornado Cash sanctions.

Economic Capture Creates Rent-Seeking. Cloud costs scale linearly with usage, creating a profit siphon to Amazon or Google. This contradicts the credible neutrality and cost-efficiency ethos of protocols like Ethereum.

Evidence: The 2021 AWS us-east-1 outage took down dYdX, Metamask, and other major dApps, demonstrating infrastructure fragility is a protocol-level concern.

Centralized cloud providers like AWS and Google Cloud are single points of failure. Their control over physical infrastructure and software stacks creates a systemic censorship vector that can be activated by corporate policy or state pressure, terminating your network's availability.

Decentralized physical infrastructure (DePIN) protocols like Akash and Render Network provide the same utility without the central control. Their fault-tolerant, permissionless markets for compute and storage eliminate the risk of a single entity pulling the plug.

The trade-off is operational complexity, not security. Managing a node fleet across DePIN requires more DevOps effort than a single AWS console. However, this complexity is the necessary price of sovereignty, transforming a technical dependency into a resilient, credibly neutral foundation.

Evidence: The 2021 AWS outage took down dYdX, a major DEX, proving that decentralized applications remain centralized at the infrastructure layer. This is an existential flaw for any entity claiming to be a sovereign network.

Centralized cloud providers are a systemic risk. AWS, Google Cloud, and Azure represent concentrated points of failure for ostensibly decentralized networks. A single provider outage or policy change can cascade across the ecosystem, as seen in the 2021 AWS outage that crippled dYdX and Metamask.

Sovereign infrastructure is a non-negotiable requirement. A network state's security and governance model must extend to its physical and logical infrastructure layer. Relying on AWS S3 for data availability or Cloudflare for RPC gateways reintroduces the trusted intermediaries that blockchains were built to eliminate.

The technical pivot is towards bare-metal, geographically distributed providers like Hetzner and OVHcloud, coupled with orchestration frameworks like Akash Network and Flux. This model guarantees operational autonomy and eliminates the political risk of centralized cloud vendor lock-in.

Evidence: The Solana network's repeated outages, often linked to centralized RPC bottlenecks, demonstrate the fragility of hybrid architectures. In contrast, networks like Monad and Sei are architecting their infrastructure stacks from first principles, treating cloud dependence as a critical vulnerability to be engineered out.