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Velocore Hacked for $7M: Linea Network Halts Block Production to Mitigate Impact

This weekend, the decentralized exchange Velocore was compromised, leading to a $7 million loss.

Ethereum Layer 2 Network Linea’s Response

The Ethereum Layer 2 network Linea, developed by Consensys, had to halt block production following a security breach at Velocore, one of the decentralized exchanges operating on its platform.

Details of the Hack

On June 1, a hacker exploited a vulnerability in Velocore, stealing $7 million in assets. The attacker swiftly moved 700 ETH, valued at about $2.7 million, off the network using a third-party bridge. To prevent further asset transfers, Linea paused its sequencer, the system responsible for processing transactions.

Linea’s efforts to reach Velocore’s team for a coordinated response were unsuccessful, prompting the block production halt.

Mitigation Measures

“From block 5081800 to 5081801, we paused the sequencer to give Velocore time to address the vulnerability,” Linea stated. “We also blacklisted the hacker’s addresses, significantly minimizing the impact on Linea users.”

The hacker’s attempts to liquidate large amounts of stolen tokens for ETH posed a risk of broader ecosystem disruption, necessitating the sequencer halt to protect users.

Aftermath and Impact

In the wake of the exploit, Velocore is collaborating with external networks to compensate affected users. According to DefiLlama, Velocore’s total value locked (TVL) plummeted from $9.2 million to less than $1 million following the hack.

The breach also had a substantial impact on Linea’s network activity. Data from Dappradar indicated a 23% drop in transactions, down to 261,000 on June 2. Additionally, Growthepie reported a 14% decrease in active addresses, from 479,000 to 409,000, within 24 hours.

Conclusion

The Velocore hack underscores the importance of robust security measures in decentralized finance. Linea’s swift action highlights the critical steps needed to protect users and maintain network integrity in the face of security threats.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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