Linea blockchain halt highlights slow decentralization of Ethereum L2s

Linea said it halted the sequencer as a “last resort” action to prevent additional funds from bridging out but intends to decentralize in the near future.

Ethereum layer-2 blockchain Linea’s decision to halt block production after being hacked highlights the need for layer-2 firms to prioritize decentralization sooner rather than later, says Alex Gluchowski, CEO of Matter Labs.

On June 2, more than $2.6 million in Ether (ETH) was transferred off Consensys-launched Linea after the hacker managed to exploit Linea-based decentralized exchange Velocore, Linea explained in an X post.

Linea has since resumed block production, but the team’s decision to halt the zkEVM blockchain showcased the need for decentralization on Ethereum layer was flagged by Gluchowski.

“Decentralizing the sequencer isn’t optional. Every serious L2 stack must race to do first,” said Gluchowski, whose firm is behind one of Linea’s competitors in zkSync.

It received a response from Linea’s product lead, Declan Fox, who agreed that decentralization isn’t an option but stressed the network is on a “solid path” to decentralizing in a far shorter time window than many of its competitors.

“Given that many Rollup frameworks more than 2 years older than us are no further ahead, I’m pretty delighted with our pace.”

Linea announced its “The Linea Voyage: Surge” campaign in April, which will aim to increase the total value locked on Linea to $3 billion. According to L2BEAT, a little over $1.2 billion is locked on the blockchain currently.

However, one onlooker criticized the firm for setting such a target in light of the recent hack.

Linea’s halt was a “last resort” action

The Linea team said it had no option but to halt its sequencer to prevent additional funds from bridging out.

“This was the last resort action to protect users on Linea.”

Linea said it was notified of the hack by Hexagate, which helped trace the stolen user funds, vulnerable smart contracts and exploiter addresses. Linea said they couldn’t immediately contact Velocore as it was the “middle of the night” in their timezone.

“Like other L2s, we are still in the ‘training wheels’ phase of existence, giving us safeguards to use.”

The hacker exploited Linea-based DEX Velocore, which moved 700 Ether — worth over $2.6 million — off Linea via a third-party bridge.

The sequencer was paused between blocks 5081800 and 5081801.

The firm stressed its intention to decentralize Linea’s network in the future, including its sequencer, which would prevent the firm from halting block production and censoring addresses.

Meanwhile, Velocore said it is working with external networks involved to issue reimbursements to impacted victims.

Related: Former Consensys employee launches new stablecoin amid regulatory uncertainty

Linea stressed that its network remains safe and secure.

Consensys launched Linea in August 2023, onboarding over 50 partners and bridging more than $26 million in Ether at the time.

Almost all Ethereum layer-2 solutions remain centralized, including Base.

According to L2BEAT data, Coinbase is currently the sole sequencer of Base. However, the firm has also asserted its intention to progressively decentralize Base over time.