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A major disruption occurred on the Cardano blockchain on November 21 after a malformed transaction caused the network to split into two separate chains. The incident was the result of a bug in the Cardano software that led to temporary instability, which affected users of Cardano, and the price of its native token, ADA, dropped.
No user funds were lost during the event; however, it raised questions about the network's resilience and the vulnerabilities in the underlying software.
The chain split happened when a malformed delegation transaction passed validation on nodes with newer software versions. This resulted in a divergence in the blockchain since older nodes rejected the transaction.
The situation was worse, as the malfunctioning transaction exploited a bug in a cryptographic library that had remained since 2022. This issue had already been observed during the Preview testnet phase, but wasn't fully addressed before it impacted the mainnet.
In response to the chain split, engineers rapidly released a hotfix and called for node operators to upgrade to version 10.5.3. The upgrade restored the network to a single chain. Block production did not stop on either chain, although the capacity was reduced, causing network congestion. Exchanges, like Upbit, temporarily halt ADA deposits and withdrawals.
Later, the person responsible for the malformed transaction came forward and revealed himself as the user named "Homer J" on the social media platform X. He gave a public apology, explaining that he was trying to recreate the problematic transaction as a part of a personal experiment. Homer J was contrite over the unforeseen impact of his actions and made clear that such disturbance was not malicious in nature; instead, it was just out of negligence.
The founder of Cardano, Charles Hoskinson, had reacted to the incident by labeling it a premeditated attack and linking it to a disgruntled stake pool operator who earlier announced his plans to inflict damage on the network.
Initial reports blamed malicious intent, but the user's admission of carelessness brought the lack of ill intent into light. Nevertheless, according to Hoskinson, law enforcement agents such as the FBI had to be involved due to the extent of the disruption and implications for a possible cyberattack.
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In the wake of the chain split and subsequent instability, ADA price shed more than 6% and added to broader market downward pressures. The disruption has again pointed to potential questions about the scalability and stability of the Cardano network.
At the same time, the Midnight token is scheduled to go live on December 8, 2025. The incident has also raised concerns about how such major events could be managed by the network in the future.
However, the Cardano network showed resilience amidst the technical difficulties. In a short time, engineers worked swiftly to address the issue with the keen cooperation of community stakeholders to prevent further damage.
