Avalanche experienced network downtime as developers addressed a bug affecting block finalization on the C-chain due to inscriptions. AVAX price dipped amid the issue, though unrelated, as other altcoins traded flat.
On February 23rd, Avalanche encountered a significant network outage lasting at least four hours as developers worked to implement solutions.
Issues arose with block finalization on Avalanche’s C-chain due to a bug associated with new inscriptions introduced on the layer-1 network, as explained by Kevin Sekniqi, co-founder of Ava Labs, during an interview with X. This resulted in a halt in transactions on the blockchain, preventing the addition of new blocks.
Avalanche utilizes a tri-chain infrastructure consisting of the C-chain, X-chain, and P-chain. The C-chain serves as the foundation for decentralized finance (DeFi) activities, where developers deploy smart contracts.
The X-chain is dedicated to asset transfers and facilitating cryptocurrency exchanges, while the P-chain acts as the validator platform, securing the network through staking AVAX, Avalanche's native token.
Sekniqi acknowledged that the extensive volume of code shipped on Avalanche likely allowed the inscription bug to go unnoticed until it affected the mainnet. Data from Avascan indicated that the issue remained unresolved at the time of reporting, although developers were actively working on addressing it.
Obviously, this is some esoteric bug from some edge case that should be handled quickly. Likely some mempool handling issue with inscriptions that hit some untested edge cases. Kevin Sekniqi, Ava Labs co-founder
During the chain's stall, AVAX experienced a decline of over 3%, trading at approximately $36 according to CoinMarketCap. However, it's worth noting that this price drop may not be directly related to the C-chain downtime. Other major altcoins traded relatively flat on that day, while the total cryptocurrency market cap experienced a slight dip after reaching $2.1 trillion in the preceding days.
The occurrence of inscriptions causing slowdowns in blockchains has been observed sporadically since their introduction on Bitcoin's network last year. Initially used to embed data on the smallest unit of Bitcoin, a Satoshi or SAT, inscriptions have since spread to alternative networks such as Avalanche, Arbitrum, Solana, and zkSync.
While some core Bitcoin developers view inscriptions as a bug and a potential threat to the integrity of the largest cryptocurrency blockchain, valued at over $1 trillion, participants have spent more than $225 million in fees deploying over 60 million inscriptions on-chain, according to data from a Dune Analytics dashboard.
