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Linea, Ethereum's layer 2 blockchain, has come under scrutiny from the crypto community following its decision to unilaterally stop block production in response to an attack on Velocore, a decentralized exchange (DEX) that operates on your network. The move has started a discussion about the importance of decentralization and censorship resistance in the blockchain industry.
The Velocore hack resulted in the transfer of 700 ETH, worth more than $2.6 million, from the Linea network through an undisclosed third-party bridge. Linea stated that it stopped the sequencer to prevent further funds from being withdrawn after failing to contact the DEX team immediately. The blockchain also redacted the hacker's addresses to mitigate the impact on its users.
Linea defended its actions, stating that the hacker was beginning to sell a significant amount of tokens for ETH, which could have created additional problems for users beyond the liquidity drain exploit.
However, the crypto community has criticized Linea's decision, with some arguing that it contradicted the basic principles of decentralization and censorship resistance.
Mert Mumtaz, CEO of Helius Labs and Solana supporter, recognized the reasoning behind the move, but questioned its long-term implications. Alex Gluchowski, CEO of Matter Labs, highlighted the importance of decentralization for all sequencers and called for layer 2 solutions prioritize integration decentralization on their platforms.
In response to the criticism, Linea reaffirmed its commitment to decentralizing its network and sequencer to avoid similar incidents in the future. Blockchain stated that its goal is to create a “permissionless and censorship-resistant environment” where the team will no longer have the power to stop block production or censor addresses.
“As our network matures into a decentralized, censorship-resistant environment, the Linea team will no longer have the ability to stop block production and censor addresses – this is the primary goal of our network,” Linea said.
Linea also noted that most competing networks still rely on centralized technical operations to safeguard ecosystem participants. The incident has reignited debate about the role of centralized entities in decentralized systems and the “blockchain trilemma” challenges that protocols and networks face in balancing security, decentralization and scalability for users.
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