What Is Linear (LINA)?

What Is Linear (LINA)?

What Is Linear (LINA)

Linear is a non-custodial, cross-chain compatible, decentralised delta-one asset protocol that allows users to create and trade in investible synthetic assets (digital and traditional) in a cost-effective manner. 

Synthetic assets are financial instruments that derive their value from the underlying assets but do not represent ownership of the underlying assets. Synthetic assets are designed to track the price of traditional assets such as stocks, bonds, and commodities and they are created synthetically through the use of smart contracts on blockchain platforms.

Price oracles provide real-time information to the smart contracts governing synthetic assets so that the value of the synthetic assets accurately reflects the price of the underlying assets. 

These are some of the benefits that Linear offers:

Low fees: Through features such as cross-chain compatibility and the high performance of Ethereum Virtual Machine (EVM) compatible blockchains, Linear is able to charge low fees. This makes it a cost-effective way to trade synthetic assets.

Access to a wide range of assets: This experience allows Linear to offer a wide range of synthetic assets, including stocks, commodities, currencies, and thematic indexes.

Transparency: All transactions on Linear are recorded on the blockchain which allows users to view them at any time. This makes Linear both transparent and auditable. 

Furthermore, Linear’s code is open-source which allows anyone to audit and review it. This helps ensure that there is no hidden malware or code that could be used to exploit users. 

How Does Linear Work

Linear uses a peer-to-peer collateralization model to create and trade synthetic assets. 

A user must first deposit collateral into Linear’s collateralized debt pool. Various digital and real-world assets, as well as the native Linear token (LINA) can be utilised as collateral.

The collateral requires a pledge ratio of around 500%, they are able to mint Linear USD which can then be used to purchase synthetic assets or mint a synthetic asset that tracks the price of the underlying asset.

The synthetic assets can be traded on the Linear Exchange, a decentralised exchange which offers a variety of features such as margin trading and leverage.

Linear Uses

There are many different ways that users can use Linear. These are some ways that it can be used:

Traders can use Linear to hedge against price movements in the traditional financial markets. For example, a trader who is bullish on a particular stock could mint a synthetic short position in the stock on Linear to hedge against a decline in price.

By allowing users to create and trade synthetic assets, Linear provides a variety of ways that they can trade. For example, traders can speculate on the price of a crypto or commodity, or to implement arbitrage strategies.

Portfolio Diversification
With access to a wide range of assets, users are able to diversify their portfolios and gain exposure to assets that may not be available on traditional exchanges.

Who Created Linear

Linear was founded in 2020 by Kevin Tai and Drey Ng. Kevin, a graduate of the University of California, Berkeley, is the CEO and Co-Founder of Linear and was the vice president of Credit Suisse in Hong Kong. He has completed more than $20 billion in divestment and acquisition deals in his career thus far. Drey is the Co-Founder of Linear and worked previously at Deutsche Bank and Liquefy, a security token company in Asia. 

While the user community and LINA holders will help drive key decisions, they do not have a say in issues such as the operation and management of the Linear protocol and the selection of the board of directors. These decisions will still be made by the core Linear team. 

The team did however mention in its whitepaper that “upon launch, we will start the planning and transition of our governance to a DAO.” LinearDAO currently governs Linear on issues such as pledge ratio, LINA inflation reward and frequency, and split on transaction fees. 

The protocol managed to raise $1.8 million in its seed funding round and counts NGC Ventures and Hashed among its early investors.

The Linear team, supported by a network of advisors such as David Schwartz and Matthew Gould, the CTO at Ripple and CEO of Onchain Capital respectively, has extensive financial experience in exotic and structured assets and technical experience from numerous crypto projects.

Why Trade LINA

The key aim of Linear is to increase inclusiveness and democratise users’ access to a wide range of investible assets by providing a platform for users to trade various assets without slippage and settlement time.

Traders may find value in LINA should they believe that with the extensive financial and technical experience of its team, Linear is able to expand financial inclusivity to all users and be an asset layer of choice where asset management decentralised applications (DApps) are built on top of.

LINA Tokenomics

LINA is the utility and governance token of the Linear protocol and these are some of its use cases:

LINA tokens are one of the collaterals used to mint Liquids, which are synthetic assets that track the price of real-world assets such as stocks, commodities, and currencies.

Economic Incentives
LINA will be distributed as incentives to encourage users to contribute and participate in Linear’s ecosystem. The amount of LINA awarded to a user is proportional to their frequency and volume of transactions, actual usage, and activity in the ecosystem. 

LINA token holders can vote on proposals that determine the direction and development of the Linear protocol. These proposals include things like fee adjustments, protocol upgrades, distribution models, and assets to be listed.

LINA has a total supply of 10,000,000,000 tokens of which 5,575,110,537 tokens are currently in circulation as of September 2023. It uses inflationary tokenomics until a terminal floor is reached. The starting inflation rate is set as 60% and decreases 1.5% per week – subject to a yearly review and modification if the LinearDAO achieves consensus to change it. 

The planned distribution of LINA tokens is as follows:

  • Staking Rewards – 40%
  • Reserve – 15%
  • Ecosystem – 10%
  • Team – 10%
  • Advisor – 5%
  • Liquidity – 5%
  • Community – 5%
  • Private 1 – 3.5%
  • Private 2 – 2.67%
  • Seed – 2.4%
  • Private 3 – 0.8%
  • Public – 0.63%

How To Trade On The Flipster App

To trade LINA on Flipster:

  1. Download the Flipster app and set up your account
  2. Go to [Trade]
  3. Click on [Search] at the top of the page and type in LINA
  4. Click on LINA
  5. In the [Amount] field, type in the amount of LINA you wish to buy or sell. Alternatively, you can select the percentages below to choose how much to use from your available funds.
  6. Click [Preview order] to check your order
  7. Once you have confirmed the details, click on the [Buy LINA – Long] button or [Sell LINA – Short] respectively.

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. 

Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.