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Last updated: Aug 16, 2023
Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol to create, trade, and manage liquid assets (Liquids) and create thematic Digital Traded Funds.
Development of the project began in the summer of 2020. In September of the same year, Linear Finance announced the completion of a $1.8 million seed funding round. The round was led by NGC Ventures, Hashed, CMS Holdings, Genesis Block, and Kenetic Capital. Alameda Research, Evernew Capital, Soul Capital, Moonrock Capital, Black Edge Capital, and PANONY also participated.
Linear is a non-custodial cross-chain protocol with unlimited liquidity, based on a debt pool backed by the native token of the platform - LINA. The primary purpose of the project is to enable users to create synthetic assets. Users who stake LINA in the debt pool can create ℓUSD — Linear's synthetic "dollars." These dollars can then be exchanged for other synthetic assets on the Linear Exchange. LINA and ℓUSD are both ERC-20 and BEP-20 tokens, and therefore can be deposited into third-party pools such as Pancakeswap, Uniswap, and Curve.
To prevent asset imbalances in the pool, a reward system is used to encourage users to stabilize the pool. The Linear debt pool acts as a decentralized counterparty for all traders on Linear Exchange, thereby generating unlimited liquidity for the platform’s users. LINA token stakers act as liquidity providers while using the platform to generate rewards.
Linear Builder is a decentralized application for collateral pool and liquidity management. Through it, users can stake LINA, build ℓUSD, earn staking rewards, and a pro-rata share of the Linear Exchange trading fees. LINA token is used as collateral when creating ℓUSD, which users have to stake . The creation of ℓUSD requires a pledge ratio of a minimum of 500% to protect the ecosystem from the possible extreme volatility of deposited assets.
Linear Exchange offers a wide range of assets for trading, including in addition to cryptocurrencies, traditional assets such as forex, commodities, and curated market indices. All assets on the Linear Exchange are synthetic assets (each ticker has the letter "ℓ" at the beginning, referring to “liquid” assets) and are traded on the BNB Chain in pairs with ℓUSD.
Linear Swap is a chain-to-chain exchange protocol designed to exchange and maintain communication between other DeFi protocols. It allows users to transfer Liquids assets, LINA, or ℓUSD tokens between blockchains with minimal fees.
Linear Vault is a tool for earning passive income. Users need to lock ℓUSD-BUSD LP tokens in order to receive the interest paid on their deposit in LINA tokens.
Linear Debt Terminator is Linear Finance latest dApp. It allows users to help safeguard the protocol and its resistance to any market conditions. Users can help liquidate marked accounts (P-ratio < 200) and earn 10% LINA rewards.
The project is currently managed through the Linear DAO. This allows for monitoring voting results, providing meaningful voting for project development, and allowing each LINA token holder to vote on decisions such as the periodicity and inflation rate of the project; the distribution of transaction fees; proposals for new features, and roadmaps for the project; and various suggestions from the community.
To interact with Linear, users need MetaMask or any other wallet supporting the WalletConnect protocol. In order to start using the platform, users must first purchase LINA tokens and mint ℓUSD or directly buy ℓUSD. Both Linear Builder and Linear Exchange run on BNB Chain therefore users will need BEP-20 LINA to interact with these dApps.
To issue the platform's ℓUSD stablecoin, users need to go to the "Buildr" tab and stake LINA tokens. After that, they receive a loan of ℓUSD, with the amount of tokens received determined by the P-Ratio. The Pledge Ratio or "P-Ratio" is set at 500%. The P-Ratio is used to determine the amount of ℓUSD that users can borrow based on the current market value of LINA. Since ℓUSD is being borrowed, users will need to pay it back in order to withdraw LINA. If they do not have enough ℓUSD, they will not be able to withdraw LINA.
ℓUSD can be used to trade synthetic assets on the Linear Exchange. The Linear fee for trading is 0.25% for each transaction on its exchange. At the same time, LINA stakers receive a portion of the Linear Exchange fee as a reward (in ℓUSD) on a weekly basis if their Pledge Ratio is above 500.
Staking LINA on the Linear platform is one of the main features that make the release of the synthetic asset ℓUSD possible. Staking is done through the Linear Buildr dApp. For staking, the user receives rewards not only in LINA tokens but also in ℓUSD, since part of the income from the exchange fees goes to the stakers. Withdrawal of LINA from staking is done by burning ℓUSD (repaying debt) in the same application.
Linear Finance utility token, LINA, is both an ERC-20 and BEP-20 token. LINA is the backbone of the protocol and is used as collateral for issuing ℓUSD, staking, liquidity mining, and governance. The total supply of LINA tokens equals 10 billion, and they are distributed according to the following ratio: seed sale 2.4%; private sale 7%; public sale 0.6%; project development team 10%; project consultant 5%; exchange liquidity 5%; ecosystem building 10%; community development 5%; reserve 15%; token staking awards 40%.
Linear audits can be found in the protocol dashboard on this webpage.
Linear Finance is led by project lead Kevin Tai and consists of a team of ~20 individuals. Kevin Tai is a Harvard Business School alumni. He started his career in Silicon Valley after which he spent the last 13+ years working in Asia for some of the top financial institutions in the world including Standard Chartered, BNP Paribas, Credit Suisse and Mirae Asset Global Investments.
Linear's main strategic partners include 3Commas, ChainLink, Band Protocol, BitMax, ellipti, Hex Trust, imToken, Moonbeam, Ervos, Panony, PieDAO, Slow Mist, Winkrypto, Xangle, and Umbrella.
Linear has now deployed integrations on Moonriver (Kusama) and Moonbeam (Polkadot), Chaotic Finance and Athos Finance, respectively. Currently, the team is working on bringing multi-asset collateral to the protocol. Further down the line, the team is looking to explore L2s, specifically ZK Rollups, being a strong possibility for the team's next endeavor.
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