diff --git a/WORKSPACE.yaml b/WORKSPACE.yaml
index c7dbba45d40b06..081b3a69136835 100644
--- a/WORKSPACE.yaml
+++ b/WORKSPACE.yaml
@@ -5,7 +5,7 @@ defaultArgs:
   npmPublishTrigger: "false"
   publishToNPM: true
   localAppVersion: unknown
-  codeCommit: 128bab190731bc4af1a6e58b9324110a0d087884
+  codeCommit: f14b5f5730b57a05656c1fef9de2f2c22ee8a0c1
 
 defaultVariant:
   srcs:
diff --git a/components/ide/code/bin/code b/components/ide/code/bin/code
index d89524d91375aa..047c2ce33fbb9c 100755
--- a/components/ide/code/bin/code
+++ b/components/ide/code/bin/code
@@ -1,2 +1,2 @@
 #!/usr/bin/env sh
-/ide/node /ide/out/gitpod-cli.js "$@"
+exec /ide/bin/gitpod-code "$@"
\ No newline at end of file
diff --git a/components/ide/code/bin/gitpod-code b/components/ide/code/bin/gitpod-code
deleted file mode 100755
index ebc3d54c228ded..00000000000000
--- a/components/ide/code/bin/gitpod-code
+++ /dev/null
@@ -1,2 +0,0 @@
-#!/usr/bin/env sh
-/ide/node /ide/out/gitpod-cli.js "$@"
\ No newline at end of file
diff --git a/components/ide/code/bin/gp-code b/components/ide/code/bin/gp-code
new file mode 100755
index 00000000000000..047c2ce33fbb9c
--- /dev/null
+++ b/components/ide/code/bin/gp-code
@@ -0,0 +1,2 @@
+#!/usr/bin/env sh
+exec /ide/bin/gitpod-code "$@"
\ No newline at end of file
diff --git a/components/ide/code/bin/open b/components/ide/code/bin/open
index d89524d91375aa..047c2ce33fbb9c 100755
--- a/components/ide/code/bin/open
+++ b/components/ide/code/bin/open
@@ -1,2 +1,2 @@
 #!/usr/bin/env sh
-/ide/node /ide/out/gitpod-cli.js "$@"
+exec /ide/bin/gitpod-code "$@"
\ No newline at end of file
diff --git a/components/ide/code/leeway.Dockerfile b/components/ide/code/leeway.Dockerfile
index 3997d50cbc0f90..44629fee5feb97 100644
--- a/components/ide/code/leeway.Dockerfile
+++ b/components/ide/code/leeway.Dockerfile
@@ -20,30 +20,38 @@ RUN mkdir gp-code \
 WORKDIR /gp-code
 RUN yarn --frozen-lockfile --network-timeout 180000
 RUN yarn --cwd ./extensions compile
-RUN yarn gulp gitpod-min
-
-# grant write permissions for built-in extensions
-RUN chmod -R ugo+w /gitpod-pkg-server/extensions
-
-# cli config
+RUN yarn gulp vscode-web-min
+RUN yarn gulp vscode-reh-linux-x64-min
+
+# config for first layer needed by blobserve
+# we also remove `static/` from resource urls as that's needed by blobserve,
+# this custom urls will be then replaced by blobserve.
+# Check pkg/blobserve/blobserve.go, `inlineVars` method
+RUN cp /vscode-web/out/vs/gitpod/browser/workbench/workbench.html /vscode-web/index.html \
+    && sed -i -e 's#static/##g' /vscode-web/index.html
+
+# cli config: alises to gitpod-code
+# can't use relative symlink as they break when copied to the image below
 COPY bin /ide/bin
 RUN chmod -R ugo+x /ide/bin
 
+# grant write permissions for built-in extensions
+RUN chmod -R ugo+w /vscode-reh-linux-x64/extensions
 
 FROM scratch
 # copy static web resources in first layer to serve from blobserve
-COPY --from=code_installer --chown=33333:33333 /gitpod-pkg-web/ /ide/
-COPY --from=code_installer --chown=33333:33333 /gitpod-pkg-server/ /ide/
+COPY --from=code_installer --chown=33333:33333 /vscode-web/ /ide/
+COPY --from=code_installer --chown=33333:33333 /vscode-reh-linux-x64/ /ide/
 COPY --chown=33333:33333 startup.sh supervisor-ide-config.json /ide/
 
-# cli config
 COPY --from=code_installer --chown=33333:33333 /ide/bin /ide/bin
+
 ENV GITPOD_ENV_APPEND_PATH /ide/bin:
 
 # editor config
-ENV GITPOD_ENV_SET_EDITOR /ide/bin/code
+ENV GITPOD_ENV_SET_EDITOR /ide/bin/gitpod-code
 ENV GITPOD_ENV_SET_VISUAL "$GITPOD_ENV_SET_EDITOR"
 ENV GITPOD_ENV_SET_GP_OPEN_EDITOR "$GITPOD_ENV_SET_EDITOR"
 ENV GITPOD_ENV_SET_GIT_EDITOR "$GITPOD_ENV_SET_EDITOR --wait"
-ENV GITPOD_ENV_SET_GP_PREVIEW_BROWSER "/ide/bin/code --preview"
-ENV GITPOD_ENV_SET_GP_EXTERNAL_BROWSER "/ide/bin/code --openExternal"
+ENV GITPOD_ENV_SET_GP_PREVIEW_BROWSER "/ide/bin/gitpod-code --preview"
+ENV GITPOD_ENV_SET_GP_EXTERNAL_BROWSER "/ide/bin/gitpod-code --openExternal"
diff --git a/components/ide/code/startup.sh b/components/ide/code/startup.sh
index f932fd2def40cc..1ba27c4e1ab649 100755
--- a/components/ide/code/startup.sh
+++ b/components/ide/code/startup.sh
@@ -37,7 +37,7 @@ grep -rl open-vsx.org /ide | xargs sed -i "s|https://open-vsx.org|$VSX_REGISTRY_
 
 cd /ide || exit
 if [ "$SUPERVISOR_DEBUG_ENABLE" = "true" ]; then
-    exec /ide/node --inspect ./out/gitpod.js "$@" --verbose --log=trace
+    exec /ide/server.sh --inspect --verbose --log trace --connectionToken 00000 "$@"
 else
-    exec /ide/node ./out/gitpod.js "$@"
+    exec /ide/server.sh --connectionToken 00000 "$@"
 fi