The introduction of the decentralized financing market salvages the KYC protocols, trusty, and controlled transactions. Consequently, the DeFi market keeps expanding swiftly.
With DeFi tokens currently operating and a market capitalization of $135.42B, the market continues to grow. However, this interesting growth creates more issues as the number of daily active users increases and transactions accumulate each second. This causes high transactional charges and delay or sluggish transaction execution in the platforms.
Linear emerged to solve the problems associated with decentralized financed like expensive transaction charges and liquidity. Utilizing the protocol, users can evade these challenges given the fast and cost-effective synthetic asset marketplace.
They can also mint their derivatives seamlessly, using an array of tokens to illustrate the risk level and financial exposure they can partake. The protocol also offers users new ways to leverage the varying yield farming opportunities.
This article has explained a detailed Linear review of everything you need to know and why you should indulge in the protocol.
What Is Linear?
Linear is a delta-one asset protocol that supports inter-blockchain transactions. The protocol is built on the Ethereum blockchain. It enables users to create, curate, and perform trades on synthetic assets. This provides users access to a wide variety of financial assets without needing to buy the assets directly.
The protocol also allows users to create a digital portfolio and manage it using an ever-improving combination of either legacy or digital products on a network with crypto-economic mechanisms. The development team focuses on utilizing the delta-one protocol standards due to its ability to provide users direct access to underlying assets and their price movements.
Delta assets are derivatives without option contracts. Meaning, any change in the real-time price of any connected asset will mirror the price of the synthetic assets or derivatives. Synthetic assets like oil, gold, commodities are traded directly using the delta-one asset protocol. The protocol hopes to terminate design problems that arose with Synthetix.
The users can relate with the protocol on Binance Smart Chain (BSC) or Ethereum blockchain. However, the former is a current preferred choice given its low transaction charges. The development team has also announced integration with the Polkadot blockchain. But, due to the limited available slots, Linear may work with the Kusama blockchain.
The big idea of the protocol is to project inclusiveness and ensure access to investment assets; while providing immunity to settlement time and price slippages. In basic terms, Linear is a modification of the Synthetix project.
Fundamentally, the network is established upon asset collateralization pools that reward its users. These pools contain the Linear ($Lina) tokens but plan to scale to other real assets. Linear solves the prevailing challenges related to the DeFi sector, e.g., high slippage and transaction fee, redundant oracle price feeds, etc.
The linear protocol has three major use cases:
- High-speed Price Rates: Oracle refreshing time is much quicker, providing real-time prices.
- Lower Transaction Costs: The gas fee charged upon every transaction is very cost-effective. Additionally, the execution time for transactions is much faster. These are enabled by the blockchain interoperability approach that supports both Ethereum blockchain and EVM-compatible mainnets. Linear protocol accomplishes this by using smart contracts.
- Governance: The LINA token holders gain some level of control and contribution in the network. It offers the ability to vote on some synth listings, oracle determination, distribution models, etc.
Linear Unique Feature
The Linear protocol ensures users unlimited liquidity and the least price slippage no matter the situation. It also encapsulates the following unique features for any user to anticipate:
- Swift and super affordable transactions: The platform promises users super-fast transaction execution for everyone. Whether you are a trader, market maker, or staker, the transaction executions will remain seamless.
- Transparency: All transactions performed in the network remain clear for the users. This reduces tailgating within the ecosystem, inhibits users from making risky trades.
- Blockchain Interoperability: Linear is an Ethereum-based protocol that supports interchain transactions. It permits working with other DeFi projects, such as Binance Smart Chain (BSC) and other mainnets.
- User-centered options: It offers users the opportunity to customize their risk-reward ratios using varying commodities, tokens, and market indices.
- Two-chained execution: Linear is developed on two different but supported blockchains. Users only need to open an EVM-supported wallet or Ethereum-based wallet.
Linear bridges the two blockchains (Ethereum and Binance Smart Chain) using complex smart contracts to handle automatic executions. This implementation gives rise to certain advantages for users. They are:
- Enhanced DeFi compatibility: The LINA token and LinearDAO are built on Binance Smart Chain and Ethereum blockchain. And the implementation of EVM and smart contract technology simplifies the platform for other DeFi platforms to interact with.
- Cost-effectiveness: Buildr and Linear Exchange work using smart contracts that are implemented on EVM-supported blockchains or mainnets. This provides Linear the ability to support the trading and building of Liquids affordably.
- Lesser Tailgating/Front-Running: Blockchains that support EVM have much quicker block time confirmation than Ethereum. This makes it much easier for users to create their Liquids at almost real-time prices using the available oracles. And it also reduces the chances of users tailgating the exchange.
The LINA Token
The Lina token is the basic token of the Linear project. It can be used for control, payment, and staking. However, the most basic use of the LINA token is to collateralize for minting the Liquids (synthetic assets) using the app Builder.
Also, the LINA token can be used as collateral for minting the lUSD tokens, which are used to buy Liquid on the exchange.
Whichever the case, the LINA token is used as collateral for minting synthetic assets and the base currency being built. This way, the system balances volatility within the protocol. Presently, the p-ratio requirement is 500% but can be reduced later based on governance polling.
- Transaction Rewards: This fee arises from users on the Linear.Exchange platform. It currently is at 0.25% per transaction and is reshared weekly to LINA stakers based on pro-rata.
- Inflationary Incentives: The token has a starting inflation rate of 75%, which reduces weekly by 1.5%. The LINA tokens are redistributed to the token stakers on a pro-rata basis as well.
- Yield Farming: This is a pivotal part of Linear because the farmers help regulate liquidity and the entire platform. During the first two years after the toke launch, active users have gotten bonus tokens. They can reinvest these tokens in other liquidity pools like Balancer, Curve, or UniSwap.
How Does Linear Work?
Linear supports the trading and minting of synthetic assets. Each synth is backed up (through over-collateralization) of lUSD stablecoins. This over-collateralization enables the system to maintain stability in times of black swan events/heavy volatility.
The protocol offers users incentives to encourage them to maintain proper collateralization of their synthetic assets. For example, a user can earn inflation or exchange rewards by holding a certain ratio of lUSD collaterals to the synths. This ratio is called the pledge ratio, or p—ratio, and is used to ensure stability in the system.
In the ecosystem, the liquidity pool acts as a counter-party. This ensures a vast amount of liquidity and minimal slippage. The protocol also rewards users LINA tokens for participating in the pool.
Also known as the p-ratio is the ratio between synth assets holdings that were created and the users’ lUSD tokens backing those synths. The protocol uses over-collateralization to ensure stable liquidity in the system even in times of very high volatility.
In simple terms, the p—ratio is the standard level of overcapitalization needed. For example, to receive any LINA tokens, a user must have a p-ratio of over 500% (which was initially 600%).
LinearDAO is the governance structure within the protocol that controls modifications, updates, deletions, additions, etc. They also govern the system parameters like the p-ratio needed to receive incentives.
The LinearDAO regulates the execution of proposals, the levels in transaction charges, and the LINA token inflation rewards. Additionally, the DAO controls profits and losses within the ecosystem.
Buildr is one of the unique packages in the Linear suite. The Linear enables users to stake their native LINA tokens to create or pile up the lUSD (the base currency of Linear Exchange) tokens. Stakers in the platform are granted a portion of the transaction fees and staking incentives.
The Linear team deployed the Buildr ecosystem on the 21st of December, 2020, after series of rigorous testings in the testnet. Buildr is a decentralized application (dApp) situated in the middle of Linear’s dApp suite. It allows users to stake the LIINA tokens, burn lUSd, and then earn incentives.
Buildr provides users access to create and burn synthetic assets and stake them into pools. Using the dApp, users can purchase assets on Linear Exchange to gain various investment exposures. Also, you can send these lUSD tokens to other dApps within the decentralized marketing ecosystem. Buildr has three main functional purposes: Build, Claim, and Burn.
Binance Smart Chain Buildr V2.0
Linear is focused on creating interchain platform functionalities on its platforms. Consequentially, succeeding in deploying Buildr dApp on the blockchain, the team has also successfully released a blockchain version of it on the BSC.
The release of Buildr v2.0 occurred just one month after its predecessor, the Buildr v1.0, on the 15th of January, 2021. However, even the development team have said:
“Linear was designed for all users (no matter how much LINA you hold), and transaction costs will not become a barrier to entry. As a result, nobody will get left behind.”
Because of the deployment of Buildr v2.0, users can now have direct interaction with the Linear platform and do so very affordably.
Warning!! Currently, there are two versions of the LINA token available. Sending a BSC version to an Ethereum wallet, and conversely, you will lose all your tokens!
Linear has a total supply of over 10,000,000 (10 billion) tokens. It is currently circulating 2.4 billion tokens around the platform, with a 75% inflation embedded to increase user incentivization. This decreases by 1.5% weekly until it reaches the terminal floor.
As a user, you can manipulate your funds within the Buildr dApp UI. Utilizing this app, you can do the following:
- Create synths (synthetic assets).
- Receive rewards.
- Control debt position— to burn USD or stake LINA.
- Swap positions within the two blockchains.
This is the second part of the Linear environment, where users can trade Liquids and create their portfolios. It was released on the 28t of January 2021. This platform lets you exchange “Liquids” (synthetic assets built by utilizing the LINA token as backup).
Synthetic assets are bought from the exchange using the base currency (lUSD), that’s also minted using LINA tokens for collateral.
Presently, the liquid offering consists of commodities, digital assets, etc.
There is a 0.25% transaction fee for every trade used as staking incentives for those who have provided Liquids with p-ratios over 500%. Using the transaction charges to reward users is one of the means to stabilize the whole network.
There are six (6) major areas of Linear Exchange. They are:
- Market: This area lists out all the available synth asset (Liquid) pairs available for trading on the exchange, with some sections divided into commodities, indices, spot cryptocurrencies.
- Market Pair: Succeeding the action of selecting an asset pair, this section displays the present price of the asset, price chart, 24hr trading volume, and 24 hr low/high price.
- Trade Order: This segment shows a user’s historical data of trades and transactions on the exchange.
- Order Form: In this phase, users can purchase their desired synth asset (Liquid) using the lUSD or sell the Liquid in exchange for the lUSD equivalent.
- Portfolio: This segment takes the user to a page where they can see all their purchased Liquids, together with the history of their transactions and a “Total Asset” tracker.
- Linear Swap: This platform interconnects Ethereum’s blockchain with Binance Smart Chain (BSC).
Transitting to Binance Smart Chain also involved the introduction of the Linear Swap platform. And, as that set made Linear an interchain-supported synth asset coin, Linear Swap stands in as the bridge between both mainnets— Ehereum blockchain and Binance Smart Chain.
This offers users access to DeFi coins on both blockchains.
A user can utilize Linear Swap to change all the synthetic assets available in Linear Finance (Liquids, LINA, lUSD) between BSC (BEP20) and Ethereum (ERC20). You can find the Linear Swap function in the “Swap” tab in the Buildr dApp.
Also, the protocol developers created the swap function into the stake and built the transactions feature of the Buildr app. Meaning, as a user, you can seamlessly bring an ERC20 amount of LINA tokens to the Buildr app, click on “Build,” and create a BEP20 equivalent of the same LINA token for you. This makes it easier for you to stake and trade on the Binance Smart Chain.
Linear Finance Partnerships
Within the past months, Linear has announced its collaboration with notable partners to upgrade the automated trading protocol, add custodial services, improve blockchain interoperability, and salvage tailgating. The partners include:
- Nervos: An open-source blockchain with a peculiar architecture that provides security and permissionless without interfering with scalability and performance. The two organizations focus on enhancing Linear Finances’ blockchain interoperability and scaling in the Chinese market.
- Hex Trust was added as a custodial partner to provide Linear, more secure, professional-grade custodial services to institutional investors.
- Moonbeam, a smart contract parachain that supports Ethereum coins, is also a partner to bridge Linear with Polkadot’s blockchain and boost interchain connections.
- 3Commas, the Crypto trading platform that enables users to build automated trading bots. This partnership occurred to “include future integration of the platforms and tools, streamlining operations and allowing for a greater range of features and offerings.”
- And then, Band Protocol, a decentralized interchain oracle. This partnership occurs to be the most pivotal partnership for Linear, as it tends to eradicate the biggest problem faced in the DeFi market, frontrunning.
The development of the Linear protocol was out of the combination of opportunity and talent. The co-founders Kevin Tai and Drey Ng, utilized their experience in tokenization and finances to actualize the big picture within only two years. There are only 11 employed members were recorded to be working with Linear. Here is a little information about four pivotal members of the protocol.
- Kevin Tai: The CEO and Co-founder of He is an experienced M&A enterprised dealer for Mobile/Enterprise software.
- Drey Ng: He is the second co-founder of the token and CTO of the foundation. He has led numerous tokenization projects for hedge funds, real estate, and government bodies.
- Aedreon Marshall: He is one of the most pivotal members of the organization. Thanks to his experience in establishing partnerships in the crypto industry between blockchain projects and individuals.
- Jonathan Lei: He is the lead Blockchain Developer at the protocol. His experience is creating dApps and blockchain engineering.
Conclusion Of Linear Review
Notwithstanding the ever-increasing and expensive transaction charges in Ethereum’s blockchain and the spiking utilization of yield Farming in the DeFi space., Linear is a platform that bridges Ethereum’s blockchain and Binance Smart Chain. This provides user blockchain interoperability, quick transaction execution, and sufficient liquidity.
The protocol provides Linear Exchange and Buildr platforms for users to leverage profit-building trading portfolios.
Linear is well-known among investors. Provided the development team implements innovative ideas to improve user experience and increase blockchain interoperability, Linear will soon become one of the most influential platforms in the DeFi space.