Cardano News Today: Cardano's Chain Split Sparks DeFi Security Debate

Cardano (ADA) experienced a temporary network split on November 20, 2025, after a malformed delegation transaction exploited a vulnerability in its cryptographic library, causing the blockchain to fracture into two distinct chains. The incident, described as a "premeditated attack" by Cardano co-founder Charles Hoskinson, occurred when a transaction passed validation on newer node versions but was rejected by older software, leading to a divergence in the ledger. The split was resolved within hours as developers released hotfixes and urged node operators to upgrade to version 10.5.3, merging the chains without compromising user funds.

The attack, attributed to a former participant in Cardano's Incentivized Testnet (ITN) era, prompted an investigation involving the FBI. A user identified as "Homer J." later admitted responsibility on social media, apologizing for what they called a "careless" experiment to reproduce a "bad transaction". While the incident caused short-term disruptions-including a 6% dip in ADA's price-network integrity was restored, and most retail wallets remained unaffected.

Despite the turmoil, ADA's price has shown resilience. CoinTelegraph analysts noted that ADA's slide below $0.50 has continued, with bears controlling the narrative. However, buyers may attempt a rebound above the 20-day EMA ($0.54) to signal weakening selling pressure. The token's ability to hold above key support levels has drawn attention, particularly after a high-profile on-chain liquidity incident saw a holder lose $6.09 million in minutes while swapping 14.4 million ADA.

The chain split and liquidity risks have reignited debates about decentralized exchange (DEX) safety. ZachXBT, a prominent on-chain analyst, highlighted the incident as a cautionary tale for large swaps on low-liquidity pools, urging users to heed slippage warnings. While Minswap, where the transaction occurred, displays red alerts for high-risk trades, the case underscores the need for greater user education in DeFi.

Cardano's governance body, Intersect, emphasized the network's resilience, noting that block production continued on both chains during the incident. "The network did not stall," the report stated, though exchanges paused deposits and withdrawals as a precaution. Hoskinson, in a video message, reiterated confidence in the platform's infrastructure, despite acknowledging the cleanup would take weeks.

As the community digests the event, ADA's price trajectory remains a focal point. While short-term bearish trends persist, analysts suggest that regulatory clarity and institutional adoption - factors driving USDC's rise over USDT - could eventually stabilize the token. For now, Cardano's ecosystem appears to have weathered the storm, with ADA's price holding above critical support levels amid ongoing technical upgrades.