Linear Finance is a relatively young and up-and-coming DeFi project that seeks to solve some of the main issues other DeFi projects experience, i.e., high transaction fees, slow transactions, etc.
Linear Finance (LINA) is a non-custodial, cross-chain compatible, delta-one asset protocol built on Ethereum. The team stresses the importance of having a delta-one asset protocol because it gives the user a one-to-one relationship with an underlying asset in regards to price movement. Its native token is LINA, which is a governance token that allows users to interact with the different services the project provides.
With the implementation of a delta-one asset protocol, traders get the true value of the underlying asset because of the “one-to-one” relationship to the price movement. Delta-one products are derivatives with no options contracts. In other words, any move in the price of an asset would subsequently have an identical move in the price of the derivative (synthetic assets in this case).
The project’s long-term vision is to increase inclusiveness and democratize access to investment assets (both digital and traditional) without slippage and settlement time.
Most importantly, the foundation of their protocol lies in their collateralized debt pool. The debt pool is currently backed by the Linear Token ($LINA). However, Linear plans to expand to other real-world assets. For reference, the users provide the collateralized assets to the debt pool to build Linear USD, which, in turn, can be used to purchase the synthetic assets on their exchange.
Linear Finance provides services for:
- Exchange to buy/sell synthetic assets
- Cross-chain swap functionality
Eight men make up the team – four main individuals running the day-to-day operations and four advisors. They are all very experienced and bring a unique set of traits to the table. The four main individuals are:
- Kevin Tai (CEO) – Tai has experience in M&A deals for enterprise/mobile software companies and doing collateralized debt and structured products for banks throughout Asia.
- Drey Ng (CTO) – Ng has experience in leading tokenization projects for real estate, hedge funds, and semi-government bodies.
- Aedreon Marshall (CMO) – Marshall has experience in forming partnerships in the cryptocurrency industry between individuals and blockchain projects.
- Jonathan Lei (Lead Blockchain Developer) – Lei has experience in blockchain engineering and creating dApps. He was also the co-founder, CTO, and lead architect for DueDex (a cryptocurrency exchange).
Linear Finance’s main competitor is Synthetix, which is another Ethereum-based protocol for the issuance of synthetic assets.
Synthetix uses decentralized oracles similar to Linear Finance. However, Linear Finance gains a competitive advantage through its cross-chain compatibility and delta-one asset protocol. So far, Linear Finance is the first and only known project to offer this combination.
Linear Finance has three main use cases:
- Faster Prices – Users can refresh prices at a much higher frequency and much lower rates through oracles.
- Low Transaction Fees and Fast Transactions – This is enabled through their cross-chain compatibility approach by supporting both the Ethereum blockchain and EVM-compatible blockchains. Therefore, the user would only need to initialize both an Ethereum-based wallet and EMV-compatible wallet. Linear can achieve this action through smart contracts.
- Governance – The token holders of their governance token (LINA) will be able to vote on synthetic asset listings, distribution models, oracle selection, pledge ratio, etc.
Image source: Linear Finance
The strategic partnerships listed above focus on things like oracles, blockchain ecosystem security, trading platforms (with automated trading bots), digital asset custodians, cryptocurrency/blockchain advisors, etc.
Tokenomics for $LINA
The max supply for $LINA is 10 billion and the current circulating supply is roughly 2.47 billion (24.7% of max supply). The project’s Whitepaper states that the starting inflation rate was set as 60% – for tokens designated in staking. The inflation rate moving forward will depend on two factors: circulating supply and expected growth of the exchange volume. Additionally, the team mentioned there will be yearly reviews for the inflation rates via LinearDAO.
In conclusion, Linear Finance offers exposure to the Ethereum DeFi ecosystem while simultaneously providing its users with lower transaction fees and faster transactions as a result of the project’s cross-chain compatibility. Therefore, we suspect that as the project gains more buzz, it will attract more users because of this feature.
- Lower transaction fees and faster transactions
- Transparency – in regards to the prices of the underlying assets via delta-one protocol
- Still a relatively new project (founded 2020)
- Main competitor: Synthetix (founded in 2017); which is a dominant force in the crypto synthetic assets space
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