Linea Hack Highlights Urgency for Decentralization in Layer-2 Solutions

Alex Gluchowski, CEO of Matter Labs, believes Linea’s decision to stop block creation following a breach emphasizes the importance of layer-2 companies giving decentralization first priority sooner rather than later.

After the hacker succeeded in compromising Linea-based decentralized exchange Velocore, Linea said in an X post on June 2 that more than $2.6 million in Ether (ETH) was transferred off Consensys-launched Linea.

Since then, Linea has restarted block creation; however, Gluchowski pointed out that the team’s choice to stop the zkEVM blockchain highlighted the necessity of decentralization on the Ethereum level.

“It is not optional to decentralize the sequencer. Every major L2 stack must compete to accomplish first,” said Gluchowski, whose company rivals one of Linea’s competitors in zkSync.

Importance of Decentralization

Declan Fox, the product lead for Linea, said that while decentralization is not an option, the network is on a “solid path” to decentralize in a considerably shorter time span than many of its rivals.

“Considering many Rollup systems more than two years older than us are no further ahead, I’m rather happy with our pace.” Aiming to raise the whole value locked on Linea to $3 billion, Linea unveiled in April its “The Linea Voyage: Surge” campaign. L2BEAT estimates that the blockchain locks just over $1.2 billion now.

One observer, however, attacked the company for aiming such a target in view of the recent incident.

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According to the Linea crew, its only choice was to stop its sequencer to prevent more money from getting out.

“This was the last resort action to defend users on Linea.” Linea claimed Hexagate informed her of the attack, which enabled her to track weak smart contracts, stolen user money, and exploiter addresses. Since it was the “middle of the night” in their timezone, Linea stated they couldn’t immediately get Velocore in touch.

“Like other L2s, we are still in the ‘training wheels’ phase of existence, thus we have protections to use.”

Using a third-party bridge, the hacker transferred 700 Ether — valued at more than $2.6 million — from Linea-based DEX Velocore off Linea. Between blocks 5081800 and 5081801, the sequencer stopped.

The company underlined its goal of future decentralizing Linea’s network, including its sequencer, which would let the company avoid stopping block creation and censoring addresses.

Velocore claimed, meantime, that it is collaborating with outside networks engaged to pay affected individuals.

Future Steps of Linea and Ongoing Challenges

Linea underlined that its network still is safe and secure.

Launching Linea in August 2023, Consensys brought on over 50 partners and bridged around $26 million in Ether at the time.

Base is one of the almost all Ethereum layer-2 solutions still centralized. L2BEAT data shows that Coinbase is the only sequencer of Base right now. The company has also declared its aim to gradually distribute Base over time, though.