Linea's Recent Hack Spotlighting Urgent Need for Rapid Decentralization in Ethereum Layer-2 Firms
Summary:
In the aftermath of a recent hack leading to a halt in Ethereum layer-2 blockchain Linea's block production, Matter Labs CEO Alex Gluchowski stresses the urgency for such layer-2 entities to expedite decentralization. The hack led to the transfer of over $2.6 million in Ether. Linea, however, has resumed block production since, and its product lead, Declan Fox, asserts they are on a solid path to decentralization. In response to the hack, Linea had to stop its sequencer, describing it as a "last resort" to guard Linea users. Currently, Velocore, the decentralized exchange exploited in the hack, is working with external networks for impacted victims' reimbursements.
The recent halt in block production by Ethereum layer-2 blockchain Linea following a hacking incident underscores the critical need for such layer-2 entities to expedite the process of decentralization, as relayed by Alex Gluchowski, CEO of Matter Labs. In an incident on June 2, a hacker managed to exploit Linea-based decentralized exchange Velocore, leading to the transfer of over $2.6 million worth of Ether (ETH) from Linea, which was initiated by Consensys. As per Linea, the blockchain has resumed block production since the incident.
Despite the resumption, Gluchowski pointed out the incident demonstrated the urgent need for decentralization within Ethereum's layer. He added that decentralization isn't optional, with every serious L2 stack needing to strive to implement it as quickly as possible. Gluchowski's firm is a competitor to Linea, operating zkSync.
Linea’s product lead, Declan Fox, agreed with him, emphasizing that decentralization isn't optional, but the network is already on a track for decentralization much faster than many rivals. He further stated, "Considering many Rollup frameworks, which are over 2 years older than us, are not any further ahead, I’m thrilled with our progress."
In April, Linea launched its campaign “The Linea Voyage: Surge”, aiming to raise the total value locked on Linea to $3 billion. As per L2BEAT, currently just over $1.2 billion is locked on the blockchain. However, a critic said that the company was overly ambitious in setting such a goal in the face of the recent hack.
In response to the hack, the Linea team maintained that the only alternative was to stop its sequencer to avoid more funds from being transferred out, stating that it was the "final step in safeguarding Linea users.". Linea was informed about the hack by Hexagate, which also located the stolen funds, the vulnerable smart contracts, and the exploiter addresses, but couldn't immediately get in touch with Velocore due to the time zone difference. Linea said it is still in the “training wheels” stage like other L2s and thus has safety measures in place.
A third-party bridge was used to move 700 Ether — valued at more than $2.6 million — off Linea, exploiting Linea-based DEX Velocore. The sequencer was temporarily paused between blocks 5081800 and 5081801. Linea expressed its future plans for decentralization, including its sequencer, which would bar the firm from stopping block production and censoring addresses.
At present, Velocore is collaborating with external networks to refund the victims affected. Meanwhile, Linea assured users that its network is secure. Consensys launched Linea in August 2023, with over 50 partners and $26 million worth of Ether bridged at the time. According to L2BEAT data, most Ethereum layer-2 solutions are centralized. Coinbase is currently the only sequencer of Base, a centralized solution. However, there are plans to gradually decentralize Base over time.
Published At
6/3/2024 5:35:38 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.