Starknet Network Experiences Outage Amid Growing Crypto Infrastructure Debates

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Starknet, a layer-2 scaling solution for Ethereum, has reported a network outage and is currently investigating the cause to restore service. This incident comes as broader debates about the reliability of centralized internet infrastructure continue in the crypto space. Recent outages, including those from Cloudflare and Amazon Web Services in 2025, have sparked renewed interest in decentralized applications (DApps) as a potential solution according to reports.

Vitalik Buterin, one of Ethereum's co-founders, has been vocal in advocating for DApps as a way to address vulnerabilities in centralized systems. He recently highlighted how decentralized apps can operate without reliance on third-party services like Cloudflare according to data. The Ethereum co-founder argued that blockchain-based applications can remain functional even in the face of infrastructure failures according to analysis.

Meanwhile, Bitwise has filed for 11 new crypto ETFs in late 2025, targeting altcoins such as Aave, Uniswap, and starknet according to filings. However, the market has not shown a strong reaction to the filings. Analysts attribute this to ETF filing fatigue and the fact that many of the products are now seen as routine under new SEC regulations according to reports.

Geopolitical tensions in Venezuela have also influenced market sentiment. Elon Musk's Starlink service is providing free internet to the country until February 3, 2026, following U.S. military actions and the capture of Nicolas Maduro according to reports. While markets initially remained calm, analysts are watching for potential long-term effects on oil production and regional stability according to analysis.

Why Did This Happen?

The Starknet outage highlights ongoing challenges in blockchain infrastructure. As more decentralized platforms emerge, the need for robust and resilient systems is becoming increasingly apparent. Recent outages from major centralized providers have underscored the risks of over-reliance on such services according to reports.

Ethereum's Buterin has long emphasized the importance of DApps in creating a more resilient and censorship-resistant internet according to analysis. His recent comments suggest that blockchain technology could offer a viable alternative to traditional infrastructure according to reports.

How Did Markets React?

Despite Bitwise's 11 new ETF filings, market activity remained subdued. This reflects a broader trend of ETF filing fatigue among investors according to reports. The lack of significant price movement indicates that markets are treating these filings as routine rather than disruptive according to analysis.

Geopolitical events in Venezuela have also drawn attention. While immediate market reactions were limited, analysts warn that long-term effects on oil supply and regional stability could still materialize according to reports.

What Are Analysts Watching Next?

Analysts are closely monitoring how the Starknet outage is resolved and whether it prompts a broader shift toward decentralized infrastructure. If the network can recover quickly, it may reinforce the appeal of layer-2 solutions.

In the altcoin space, the launch of new ETFs is expected to create liquidity shifts, though the extent of their impact remains uncertain according to reports. Analysts suggest that the real impact may come from distribution channels, particularly as major platforms like Vanguard consider expanding access to crypto ETFs according to analysis.

The ongoing geopolitical developments in Latin America are also being watched closely according to reports. While the U.S. has not taken such direct action in the region in decades, the implications for global markets are still being assessed according to analysis.