Linea, an Ethereum layer-2 blockchain, faced criticism after it revealed it had unilaterally halted block production due to a hack on Velocore, a decentralized exchange operating on its network.

During the incident, over the weekend, 700 ETH—equivalent to more than $2.6 million—was transferred off Linea's layer-2 network via an unnamed third-party bridge following the Velocore hack, resulting in a total loss of $6.8 million from Velocore. Linea explained that it paused its sequencer at block numbers 5081800 and 5081801 because it could not immediately reach the DEX team, aiming to prevent further fund bridging.

Linea justified its actions, noting that the hacker was preparing to convert a substantial amount of tokens into ETH, potentially exacerbating the impact beyond the initial exploit of draining liquidity pools.

Criticism from the crypto community ensued, arguing that Linea's decision contradicted the decentralized ethos of the industry. Mert Mumtaz, CEO of Helius Labs and a Solana advocate, acknowledged the reasoning but expressed concerns about its implications for the industry's integrity.

Echoing this sentiment, Alex Gluchowski, CEO of Matter Labs, emphasized the necessity for decentralization across all layer-2 solutions, urging them to prioritize decentralized sequencers.

In response to the backlash, Linea reiterated its commitment to decentralizing its network and sequencer to prevent future occurrences. The blockchain emphasized its goal of achieving a fully decentralized, censorship-resistant environment, contrasting with other networks that rely on centralized technical operations for ecosystem protection.