Canto, the Cosmos-based layer-1 blockchain, has experienced a significant disruption, remaining offline for over 33 hours due to a critical consensus issue. This prolonged outage has led to widespread concern among users and investors, resulting in an initial 21% decline in the value of the CANTO token, which partially recovered over the weekend.

Prolonged Network Paralysis

Data from Etherscan indicated that the last confirmed transaction on the Canto blockchain was recorded on August 10, with no subsequent activity. This was corroborated by Canto’s official block explorer, CantoScan, which confirmed that the last processed block, numbered 10847516, was completed at 2:29 a.m. on August 11. The network paralysis has halted all blockchain activities, leaving users unable to perform any transactions.

Official Response and Planned Upgrade

The Canto team acknowledged the issue on social media, informing the community that the blockchain was experiencing a consensus issue that caused the chain to halt. The team assured users that an upgrade to address the problem was scheduled for Monday, August 12, at 12:00 p.m. UTC. They emphasized that all funds remained secure and that users would regain access to all activities once the network resumed operations. Despite this reassurance, the exact nature of the consensus issue has not been disclosed, leaving the community in the dark about the specific technical difficulties faced by the blockchain.

Impact of Recent Upgrade and Network Stability

The outage occurred shortly after Canto implemented the Callisto upgrade on August 9. It remains unclear whether this upgrade is linked to the current consensus issue, as the team has not specified whether the upgrade was successfully completed or if it contributed to the network’s problems. This uncertainty adds another layer of complexity to the ongoing situation, raising questions about the stability and reliability of the blockchain.

Historical Volatility and Strategic Shifts

Since its launch in August 2022, Canto has experienced significant volatility. The blockchain, marketed as a permissionless, general-purpose platform for decentralized finance (DeFi) applications, saw rapid growth earlier in the year. In March, the total value locked (TVL) in Canto’s DeFi services surged to over $200 million as investors were drawn to its offerings, which include lending, staking, and liquidity provision. However, this growth was not sustained, and on-chain activity declined sharply, with TVL plummeting to $13.7 million according to DefiLlama, and the CANTO token losing 83% of its value since May 24.

Canto’s journey has also been marked by strategic shifts. Initially, the blockchain planned to migrate to the Ethereum network in September 2023, transitioning to a layer-2 network. However, this decision was reversed in March 2024, and Canto continued to operate as a layer-1 blockchain. These strategic pivots reflect the challenges and uncertainties faced by the platform as it navigates the competitive DeFi landscape.

Assurance of Fund Safety and Future Prospects

Despite the current outage, the Canto team has reassured users that their funds are safe and that normal operations will resume once the consensus issue is resolved. The scheduled upgrade on August 12 is anticipated to restore the network’s functionality, allowing users to access all services as usual. This assurance aims to alleviate some of the concerns among users and investors, although the extended downtime has undoubtedly impacted confidence in the platform.

Community and Industry Implications

As the blockchain community awaits the scheduled upgrade, there is keen interest in how Canto manages this crisis and whether the network can recover from this significant disruption. The outcome of this incident could have far-reaching implications for Canto’s future and its position in the competitive DeFi space. The ability of Canto to navigate this challenge will be closely watched by the industry, as it could influence the platform’s reputation and user trust moving forward.

In summary, the critical consensus issue that has halted Canto’s blockchain operations underscores the complexities and challenges associated with maintaining a secure and reliable blockchain network. The scheduled upgrade and subsequent resolution of this issue will be crucial in determining the platform’s resilience and future trajectory in the DeFi sector.

Source : CoinTrust - Aug 12, 2024