Introduction to the Cardano Network Incident
The Cardano network recently experienced a significant incident that caused panic among its users and the broader cryptocurrency community. On November 21, 2025, a malformed transaction triggered a chain split on the Cardano network, stemming from an old bug dating back to 2022. This incident was unintentionally exploited by a stake pool operator (SPO) relying on AI-generated instructions, causing nodes to diverge and creating two competing chains.
Understanding the Chain Split and Its Resolution
According to CoinLaw, despite the severity of the incident, the network did not shut down. Independent node operators detected the abnormal behavior early and coordinated through decentralized means to deploy an emergency software patch. These patched nodes formed consensus, allowing the valid chain to continue. Intersect, a key Cardano ecosystem organization, confirmed that the chain split was temporary and Ouroboros consensus mechanisms functioned as intended, with valid nodes eventually outweighing the invalid ones.
Technical Details of the Incident
The malformed transaction caused a rare edge-case error in the node implementation, leading to a fork where some nodes accepted invalid data. This fractured the network briefly and disrupted core services, including decentralized finance (DeFi) applications and block rewards. The swift deployment of a patch resolved the issue, preventing a complete network shutdown.
Market and Community Reaction
The incident led to a pause in deposits and withdrawals by several cryptocurrency and third-party service providers as a precautionary measure. A specialized working group was tasked with reconciling valid transactions from the poisoned chain into the main “healthy” chain. The ADA price also tumbled below $0.50 during the incident, as reported by ZyCrypto.
Lessons Learned and Future Implications
The Cardano network incident highlights the importance of robust testing and validation of AI-generated instructions in cryptocurrency ecosystems. It also underscores the resilience of decentralized networks and the swift action of their communities in resolving issues. As the cryptocurrency space continues to evolve, incidents like these will serve as crucial learning experiences for improving network security and stability.