Cardano has faced its most disruptive moment since 2017 after a malformed transaction triggered a chain split across the $14 billion network. The incident exposed a three-year-old bug in its node software and created two competing chains on the mainnet. The anomaly first appeared on the testnet one day earlier, which raised new concerns across the ecosystem.
Intersect reported that the exploit allowed a crafted delegation transaction to pass validation on newer nodes but fail on older ones. This difference produced two parallel ledger states that operated at the same time.
Cardano continued block production on both chains, and some identical transactions appeared on each side. Yet the split created uncertainty for users, developers, and platforms monitoring live network data.
At the same time, block explorers struggled to read the fractured network. Some froze entirely, while others displayed conflicting ledger information. DeFi protocols also faced irregular behavior, since smart contracts executed on one chain while related transactions sometimes landed on the other.
Settlement times slowed sharply. Cardano normally processes transactions within seconds, yet many transactions took minutes or failed. This slowdown affected traders as concerns spread through the community.
Charles Hoskinson posted a ‘Myths vs Facts’ breakdown to address widespread confusion. He stated that the mainnet did not shut down and the core protocol never failed.
He responded to claims of a rollback and rejected statements suggesting that an AI-generated transaction destroyed the network. He urged users to share verified information, especially after previous cases of misinformation. This included an earlier incident regarding false allegations about the Cardano treasury.
His post also noted that the issue came from an edge case within node implementation. Stake pool operators, exchanges, and engineers detected the anomaly quickly, which allowed for immediate troubleshooting.
Even so, ADA fell as much as 16% during the disruption before it steadied near $0.41. This raised a key question for observers: how resilient can a network remain when unexpected edge cases still surface?
Emergency coordination began immediately between Input Output Global, the Cardano Foundation, Intersect, and EMURGO. Teams diagnosed the bug within hours and shipped patched node versions.
The network naturally converged back to a single chain by Nov. 22 after updated nodes reached consensus. Validators and operators moved quickly to upgrade their systems, which restored full stability.
Major exchanges also paused operations. Coinbase halted ADA deposits and withdrawals for about 14 hours, starting at 12:15 UTC on Nov. 21. Upbit and Kraken applied shorter pauses as they waited for the chain to clearly stabilize.
Liquidity temporarily froze for millions of ADA users as platforms validated which chain dominated. Once the unified chain strengthened, exchanges progressively restored services.
An X user known as ‘Homer J’ claimed responsibility for submitting the malformed transaction. The developer said the act began as a personal test after seeing the anomaly on the testnet.
They admitted using AI-generated instructions to firewall a Linux server without proper checks. They apologized publicly and accepted responsibility, calling the action careless and avoidable.
Cardano experienced a rare chain split after a malformed transaction exploited a node software bug. Developers, validators, and exchanges reacted quickly, releasing patches and restoring stable operations. The incident shows the importance of rapid coordination across ecosystems as networks evolve, urging users to rely on verified information.
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