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Degen Chain Outage: Network Restored, L3 Debate Reignited

The recent two-day outage of the Degen Chain proved to be more than a mere inconvenience, causing significant disruption as the network failed to generate a block for over 53 hours. This interruption had far-reaching consequences, rendering the network and its affiliated applications inoperable.

As per its block explorer, the network experienced a halt at 8:15 p.m. UTC on May 12, indicating the time of the last successfully produced block.

Degen Chain Stalled Due to Configuration Error

Degen Chain stands out as one of the select layer-3 blockchains that handle transaction settlements through a layer-2 network. Specifically, it leverages the Ethereum layer-2 chain, Base, for settlements and relies on the AnyTrust protocol for data availability functions.

In a post dated May 14 on X, Degen Chain disclosed its close collaboration with its development partner, Conduit, a rollup infrastructure platform.

Conduit played a crucial role in identifying the root cause of the problem, pinpointing a “custom config change” that impacted both Degen Chain and the gaming network Apex, resulting in the halt of block production.

Restoration Efforts and Community Impact

At present, nodes on the Degen Chain are undergoing resynchronization from the genesis block, marking the network’s initial block, as part of the restoration process. Conduit affirmed, “We’re collaborating with both teams and Offchain Labs to restore service and minimize disruption for users.”

Degen Chain anticipates that the network will regain full functionality following the resynchronization, which is projected to conclude by 1:00 p.m. UTC on May 15 (6:00 a.m. PST on May 15).

The downtime experienced by Degen Chain, a layer-3 blockchain primarily known for its native meme coin, Degen (DEGEN), directly impacted various decentralized applications hosted by the blockchain.

Services such as DegenSwap, Mint Club, and the bridging platform Relay Bridge were all inactive during this period. Consequently, the native DEGEN token witnessed a significant decline, dropping by 24% from its seven-day peak of $0.02 on May 13 to $0.015, according to CoinGecko data.

Debate Reignited: The Role of Layer-3 Networks

This incident has reignited debates within the crypto community regarding the viability and significance of Layer-3 (L3) networks. Polygon CEO Marc Boiron has previously asserted that these networks “exist solely to siphon value away from Ethereum and onto the [layer-2s] upon which the L3s are constructed.”

Boiron criticized Ethereum Layer 3 (L3) networks, contending that they are redundant for scaling and divert value from the mainnet, potentially compromising Ethereum’s security.

“L3s only transfer value to the Layer 2 (L2) networks they are built on, putting Ethereum’s security at risk,” Boiron remarked. He disagreed with the notion that L2 value equates to Ethereum value, warning that if all L3s settled to one L2, Ethereum would capture minimal value and face security threats.

Furthermore, Boiron emphasized Polygon’s focus on scaling Ethereum and ensuring equitable value distribution between Polygon and Ethereum.

Conversely, proponents of Layer-3 solutions, such as Arbitrum Foundation researcher Patrick McCorry, argue that they offer benefits by utilizing layer-2 networks as settlement layers, thereby reducing transaction costs.

Degen Chain recently witnessed a surge in activity, with nearly $100 million in transaction volume recorded a few days ago. Since its inception, it has logged over 272,000 unique transactions and spawned over 7,500 contracts and 2,300 tokens. However, many of these tokens have been associated with rug pulls and scams.

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I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

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