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Linea Plans Decentralization After Halting Block Production Due to $7M Velocore Breach

Hassan Shittu
Last updated: | 3 min read
Linea Plans Decentralization After Halting Block Production Due to $7M Velocore Breach

Ethereum Layer-2 blockchain Linea has announced plans to decentralize its network following a deliberate halt in block production due to a security breach on Velocore.

The decision came in response to a security exploit on Velocore, a decentralized exchange on the network, which resulted in the unauthorized withdrawal of 700 ETH (approximately $2.6 million) via a third-party bridge.

Linea’s Response to Velocore Hack


On June 2nd, Velocore, a decentralized exchange (DEX) operating on Consensys’ zero-knowledge Ethereum Virtual Machine (zkEVM) and Matter Labs’ zkSyncEra, experienced a significant exploit affecting its volatile pools. Volatile pools are liquidity pools for assets that do not correlate with each other.

The Velocore team reported a loss of approximately $6.8 million worth of ether due to the exploit, which targeted vulnerabilities in its “Balancer-style CPMM pool contract.” They clarified that the exploit was confined to volatile pools, while stable pools remained unaffected.

Linea responded to the security breach by halting block production. This move came after the blockchain security firm Hexagate alerted Linea to the exploit. The attacker had withdrawn 700 ETH (approximately $2.6 million) via a third-party bridge.

In response, Linea deployed various ecosystem security measures to mitigate the damage. These measures included halting the blockchain sequencer, effectively preventing additional funds from being bridged out by the exploiter.

“Linea’s team made a decision to halt block production by pausing the sequencer and censor attacker addresses to protect the users and builders in our ecosystem,” the company stated. “One of the key drivers in our decision to pause the sequencer was that the hacker had acquired and was beginning to sell a large sum of tokens into ether.”

“This was the last resort action to protect users on Linea,” the team stated, emphasizing the necessity of the measure. Due to the timing of the incident, immediate contact with Velocore was not possible.

Like many Layer 2 solutions, Linea is currently in its “training wheels” phase. This provides the team with certain safeguards, including the ability to pause the sequencer. This action was taken between blocks 5081800 and 5081801 to mitigate the exploit’s impact.

Linea Prioritizes Decentralization Amid Sequencer Incident, Sets $3B TVL Goal


Linea announced its plans to decentralize its network in response to a recent security breach on Velocore. The breach led Linea to a deliberate halt in block production after the unauthorized withdrawal of 700 ETH. Linea’s core team emphasized that decentralization remains a primary goal for their network to prevent similar incidents in the future. Also, decentralizing the sequencer, which organizes and batches off-chain transactions before submitting them to the Ethereum mainnet, is crucial for maintaining the network’s operation.

“Linea’s goal is to decentralize our network – including the sequencer. When our network matures to a decentralized, censorship-resistant environment, Linea’s team will no longer have the ability to halt block production and censor addresses,” stated Linea.

Currently, Linea, like most Layer-2 solutions, relies on centralized technical operations to protect ecosystem participants. Despite this reliance, the team is committed to fostering a permissionless and censorship-resistant environment.

In response to the breach, Velocore and Linea have requested centralized exchanges (CEX) to freeze the exploited funds. Additionally, Velocore is establishing an on-chain negotiation process to address the situation.

This incident has sparked comments from industry figures. This includes Matter Labs’ CEO, Alex Gluchowski, who highlighted the need for Layer 2 networks to prioritize decentralization. Declan Fox, Linea’s product lead, reiterated the project’s commitment to decentralization in response to Gluchowski’s comments. “Linea is on a solid path to decentralizing all aspects of the network in a very aggressive time window,” Fox said.