Cardano chain split after malformed delegation exploits deserialisation bug
On 21 November 2025 Cardano (ADA) experienced a rare chain split after a deliberately crafted delegation transaction exploited a long‑standing deserialisation bug in node validation. Newer node versions accepted the malformed delegation while older versions rejected it, producing two competing ledger histories and fragmenting the network for several hours. Block production continued on both branches, causing slow block production, delayed confirmations, inconsistent state across nodes, and disruption to exchanges, block explorers and DeFi protocols; several exchanges temporarily suspended ADA deposits and withdrawals. Core Cardano organisations (IOG, Cardano Foundation, Intersect, EMURGO) released emergency patched node software within about three hours and instructed operators to upgrade, enabling network reconvergence. No funds were reported stolen. The transaction publisher later apologised and called it an experiment; Charles Hoskinson described it as a potential targeted attack and said authorities were notified, prompting controversy and at least one public resignation. The incident exposed risks from version fragmentation, validation inconsistencies and governance coordination. Recommended mitigations include stricter uniform validation, formal verification of serialisation libraries, enforced deprecation timelines and stronger upgrade coordination, adversarial testing, clearer developer experiment guidelines, and improved incident response and communication with exchanges and infrastructure providers. Traders should monitor node upgrade adoption, exchange custody status, confirmation times and ADA liquidity as the network completes recovery, because reputational damage and short‑term volatility may persist until confidence and uniform validation are restored.
Bearish
Short term: Bearish. The chain split caused operational disruption, exchange deposit/withdrawal suspensions and delayed confirmations, increasing sell pressure and spiking volatility. ADA’s temporary price dip reflected reduced market confidence and liquidity risk while infrastructure providers and exchanges paused flows. Traders facing uncertain confirmations and potential replay/inconsistency risks are more likely to reduce exposure until uniform validation is confirmed. Medium/long term: Neutral-to-cautiously bullish conditional on fixes. No funds were stolen and core teams issued rapid patches and coordination. If node upgrade adoption is fast, formal fixes (formal verification, stricter validation and clearer upgrade governance) are implemented and communication with custodians improves, confidence can recover and ADA’s fundamentals remain intact. However, repeated or slow-to-fix consensus/validation bugs would be structurally negative, increasing perceived protocol risk and depressing long‑term valuations. Overall the immediate market impact is bearish, but longer‑term outlook depends on upgrade rollout speed, adoption and governance reforms.