Cardano Network Faces Temporary Chain Split Due to Malformed Transaction

According to Cointelegraph, the Cardano network experienced a temporary chain split on Friday, triggered by a "malformed" delegation transaction. This transaction, while valid at the protocol level, exploited an old code bug in the software library used by Cardano, leading to a network partition. The incident report from Cardano ecosystem organization Intersect highlighted that the split occurred due to a disagreement in how nodes processed the transaction. Staking pool operators were instructed to update their node software to resolve the issue and merge the split chain back into a single blockchain history. The incident has raised concerns about orphaned transactions and the potential for ADA double-spends, which could result in economic losses for some users. The exploit was attributed to an ADA staking pool operator known as Homer J, who used AI-generated code to execute the transaction and has taken responsibility for the network partition. This event sparked debate within the Cardano community, with some viewing Homer J's actions as a means to expose critical bugs, while others, including Cardano founder Charles Hoskinson, considered it an attack on the network. U.S. President Donald Trump has not commented on the incident, but Charles Hoskinson revealed that the U.S. Federal Bureau of Investigation (FBI) is investigating the matter. In a video statement, Hoskinson emphasized the seriousness of the situation, likening it to tampering with and damaging a digital network, which could have significant implications for the lives and commerce of millions of people. Despite the severity of the incident, the price of ADA experienced only a modest decline, dropping from $0.44 on Friday to approximately $0.40. This decline occurred amid a broader crypto market downturn that began in October, following a historic flash crash that resulted in a $20 billion cascade of crypto liquidations. The Cardano network partition went largely unnoticed by the market, with some users attributing this to a lack of widespread use of the network. The incident underscores the challenges blockchain protocols face in maintaining network stability and security, as well as the potential impact of network disruptions on token prices. As the investigation continues, the Cardano community remains divided on the implications of the exploit and the future of the network.