Cardano suffers temporary chain split from code bug, but ADA hangs on

The Cardano blockchain network faced a temporary chain split due to an old software bug that was triggered by an abnormal transaction. This incident occurred on Friday and involved a malformed delegation transaction, which allowed users to delegate ADA to a staking pool. While these transactions are valid on the protocol level, they can lead to malfunctions that disrupt network functionality.

Cardano chain split caused by old software bug and malformed transaction

The malformed transaction exploited a bug in the underlying software library of the Cardano blockchain. This resulted in a network partition because nodes were unable to agree on how to process the transaction. According to a report from Intersect, an organization within the Cardano ecosystem, the issue arose from a staking pool operator known as Homer J, who used AI-generated code to initiate the problematic transaction.

Staking pool operators directed to update software to resolve the issue

In response to the chain split, staking pool operators were instructed to download the latest version of the node software. This update was necessary to address the bug and reestablish a single blockchain history. However, the split has raised concerns among users regarding orphaned transactions and the risk of ADA double-spends, which could result in economic losses.

Community debates incident as FBI investigates potential economic impact

The incident has sparked a debate within the Cardano community. Some community members believe that Homer J’s actions have helped to uncover significant bugs in the system, while others, including Cardano founder Charles Hoskinson, have labeled the event as an attack on the network. Hoskinson has also stated that the FBI is now investigating the situation, emphasizing the serious implications of such disruptions on the lives and finances of many individuals.

ADA price sees modest decline despite broader crypto market challenges

Typically, a chain split or similar disruptions in blockchain networks can negatively affect the price of the native tokens. In this case, the price of ADA did drop, falling from $0.44 on Friday to approximately $0.40 at the time of writing. However, this decline was relatively modest, occurring amidst a broader downturn in the cryptocurrency market that began in October, following a historic flash crash that resulted in significant liquidations. Interestingly, some users noted that the chain split went unnoticed by many because of Cardano's lower usage compared to other networks.