The recent hack and subsequent halt of block production on the Ethereum layer-2 blockchain Linea has brought attention to the importance of decentralization for layer-2 firms, according to Alex Gluchowski, CEO of Matter Labs. On June 2, a hacker exploited the Linea-based decentralized exchange Velocore and transferred more than $2.6 million in Ether. Linea has since resumed block production, but Gluchowski emphasized the need for decentralization on Ethereum layer-2. Linea’s product lead, Declan Fox, agreed that decentralization is crucial but assured that the network is on track to achieve it in a shorter time frame compared to its competitors.
In April, Linea announced its campaign “The Linea Voyage: Surge” with the goal of increasing the total value locked on the blockchain to $3 billion. Currently, over $1.2 billion is locked on Linea. However, some criticized the firm for setting such a target after the recent hack. Linea’s decision to halt block production was a last resort to prevent further funds from being compromised.
The hacker exploited Linea-based DEX Velocore and moved 700 Ether, equivalent to over $2.6 million, off Linea through a third-party bridge. Linea’s sequencer was paused temporarily to address the issue. Linea expressed its intention to decentralize its network, including the sequencer, to prevent future block production halts and address censorship concerns.
Velocore is working with external networks to provide reimbursements to affected victims. Linea reassured users that its network remains secure. Linea was launched by Consensys in August 2023 and has onboarded over 50 partners while bridging more than $26 million in Ether at the time.
Currently, most Ethereum layer-2 solutions, including Base, are centralized. According to L2BEAT data, Coinbase is the sole sequencer of Base. However, Coinbase has also expressed its intention to gradually decentralize Base in the future.