On June 2, more than $2.6 million in Ethereum (ETH) was siphoned off Linea after a hacker exploited the Velocore decentralized exchange, which operates on the Linea network.
On June 2, more than $2.6 million in Ethereum (ETH) was siphoned off Linea after a hacker exploited the Velocore decentralized exchange, which operates on the Linea network. Linea explained in a post on X that while block production has since resumed, the temporary halt revealed vulnerabilities inherent in the current centralized structure of many layer-2 solutions.
The halt in block production was described by Linea as a "last resort" measure to protect users' funds from further exploitation. The team was alerted to the hack by Hexagate, which assisted in tracing the stolen funds and identifying vulnerable smart contracts and exploiter addresses. Due to time zone differences, immediate contact with Velocore was not possible when the hack occurred.
Alex Gluchowski, CEO of Matter Labs, highlighted the importance of decentralizing the sequencer, stating that it is essential for serious layer-2 projects. Matter Labs is the company behind zkSync, another L2 network. Responding to Gluchowski, Linea’s product lead, Declan Fox, acknowledged the necessity of decentralization but emphasized that Linea is on a solid trajectory towards achieving it faster than many older projects.
Linea acknowledged that, like other layer-2 solutions, it is still in the "training wheels" phase, which necessitates certain safeguards, including the ability to halt the sequencer. The hacker managed to transfer 700 ETH, worth over $2.6 million, off the network via a third-party bridge, necessitating the pause between blocks 5081800 and 5081801.
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