Introduction
On November 21, a transaction originating from a wallet belonging to a former testnet participant on the Cardano Network occurred, which was technically classified as “corrupt.” While this transaction was accepted as valid by new version Cardano nodes, it was deemed invalid by older version nodes. It was emphasized that there was no decrease in users’ funds during this time. It was stated that retail wallets were largely unaffected. Input Output Global (IOG) released node versions that accepted the faulty transaction.
In this report, we will discuss the potential loss of prestige that this chain split on the Cardano Network could cause for ADA.
What is a Chain Fork (Fork) and Its Causes
In blockchain networks, multiple chain branches (forks) may temporarily form due to blocks being produced within the same time interval. This can also be referred to as a chain split. The network determines which of these branches is the valid chain according to consensus rules. This chain, accepted as valid by consensus, is called the canonical chain.
Nodes update their ledger states by following the canonical chain, which represents the most current and valid state. Centralized Exchanges (CEX) store their assets in their own wallets and match transactions on the chain with users. Only the canonical chain accepted by the network is referenced. CEXs can verify that a transfer has been finalized and whether a transaction can be reversed.
The fact that Cardano experienced problems at the application layer due to an error in its verification logic indicates that the issue stemmed from the node software’s intersect (a verification error), not from consensus. The same transaction may appear to exist before the canonical chain is finalized.
Ouroboros, the Proof-of-Stake (PoS) consensus protocol used by Cardano, determines which blocks are valid, allowing them to merge into a single Chain. Chain forking, on the other hand, is the simultaneous creation of multiple valid chain branches. This situation usually arises when nodes on the network accept different blocks as valid, produce different blocks for the same time period, or interpret the consensus rules differently.
Mainnet and Network Architecture
Mainnet, also known as the production or primary network, contains the official functional versions. Exchanges, Stake Pool Operators (SPOs), DApps, wallets, development, transaction processing, and other needs can use the main network.
Node software is built on blockchain technologies, continuous operation, and verification. Ouroboros Praos is a system designed to cope with real-world network conditions where some nodes may be temporarily disconnected from the network. According to the Ouroboros Praos system, even if the network connection is lost, the network can continue to produce blocks.
When nodes rejoin the network at a lower chain density, they can rejoin normal block production. In this way, the network remains resilient to changes in connectivity. Disconnected nodes can be reconnected to the main Chain by their operators.
dbtruncator and Resynchronization
The system that enables this is called the “dbtruncator.” This system uses a database tool used in Cardano nodes to truncate the local block database to a point prior to the Chain Fork. This is then done by resynchronizing with the main network.
Inconsistencies in the validation layer of the node software can cause a transfer that does not conform to the data structure expected by the protocol. In this case, an AI-powered experiment triggered a chain split due to Cardano node incompatibility, resulting in two different paths after the same block.
The network appears to be temporarily split into two chain branches. Therefore, it was thought that a short-term chain split occurred on the Cardano Network as a result of an incorrectly formatted transaction not being validated by different node versions.
Impact on the Cardano Network
This situation raised serious questions regarding network governance and institutional trust. This incident on the Cardano Network once again highlighted how critical software compatibility and coordination are, even in Proof-of-Stake (PoS) networks.
Stake pool operators were urged to update, and a call was made to rejoin the canonical chain. Cardano founder Charles Hoskinson described this situation as a targeted action by a stake pool operator seeking to damage the reputation of Input Output Global (IOG).
Testnet Legacy and Backward Compatibility
Cardano can recover node wallets using the old testnet system. Old testnets were created during Cardano’s early testing phases and were migrated to the mainnet. Temporary ledger structures were used during the early development process and testnet periods.
Cardano, in the stages where it tested the network structure, shows which transactions are valid and the formats created regarding the current state of the network through ledger structures on the mainnet due to Backward compatibility with temporary ledger structures with different transaction formats and data serialization rules.
Conclusion
Mithril (snapshot) may be among the alternative methods for resynchronizing the node to the main Chain. This method ensures that the network can be used according to its current and canonical chain state without having to download and verify the entire blockchain history from the beginning.
The chain split on the Cardano Network revealed that it could cause a security breach and that software compatibility and update coordination in decentralized networks pose a systemic risk to other coins as well.
Disclaimer
This content is provided for educational and informational purposes only and does not constitute financial, investment, legal, or professional advice. Cryptocurrency and blockchain-related technologies involve significant risk, including but not limited to market volatility, technical failures, software vulnerabilities, and regulatory uncertainty.
The information presented is based on publicly available sources and interpretations at the time of writing and may become outdated without notice. Readers are strongly encouraged to conduct their own independent research and consult with qualified financial or technical professionals before making any decisions related to digital assets or blockchain networks.
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