Malformed Transaction Splits Cardano Mainnet
Cardano experienced a rare chain partition on November 21 when a malformed delegation transaction exploited a deserialization vulnerability in node software. The mainnet split into a “healthy” chain (excluding the bad transaction) and a “poisoned” chain (including it), causing staking pools, wallets and dApps to stall and ADA to tumble over 6%. Within 12 hours, the Intersect governance body and Input Output Global released hotfixes (node v10.5.2/10.5.3) and urged all operators to upgrade to the healthy chain. No user funds were lost. Cardano co-founder Charles Hoskinson denounced the event as a premeditated attack by disgruntled SPOs and has notified the FBI. The wallet owner later apologized, citing a technical challenge and AI-generated code. Intersect is now conducting a full post-mortem and will publish an official incident report.
Neutral
The chain partition caused a short-lived sell-off in ADA, reflecting traders’ immediate reaction to network instability. However, the quick release of hotfixes, coordinated governance response and zero fund losses have restored confidence. In the short term, ADA saw heightened volatility as operators upgraded nodes and staking resumed. Long term, the incident highlights the importance of node version management but is unlikely to alter Cardano’s development trajectory or fundamental value. Similar past events—such as Ethereum’s temporary forks—also led to momentary price dips followed by rapid recovery. Overall, market reactions are expected to normalize, making the impact neutral.