DeFi platform Linear Finance has decided to close its operations after years of trying to sustain the project. Linear Finance let users trade synthetic assets without owning the actual assets.
Founded in 2020 by Kevin Tai and Drey Ng, it operates on the Ethereum blockchain and connects with other blockchains, enabling faster, cheaper, and more scalable transactions for users.
Linear Finance allowed users to create and trade synthetic assets called “liquids.” These assets represented cryptocurrencies, commodities, forex, and stock market indices. To generate the Liquids, users had to stake the platform’s native token, LINA, as collateral, often alongside the platform’s stablecoin, ℓUSD.
LINA was more than a collateral token; it enabled staking for rewards and granted holders voting rights via LinearDAO. The platform initially released 10 billion LINA tokens under an inflationary model.
Linear Finance developed ℓUSD as a stablecoin, using over-collateralized backing to maintain stability amid market fluctuations. Alongside this, Linear Finance introduced platforms like Linear Buildr, where users could stake LINA to produce Liquids and mint ℓUSD. They also launched Linear Exchange, a trading center known for its swift transactions and boundless liquidity.
The team raised $1.8 million in seed funding from investors like Alameda Research and NGC Ventures, followed by a $310,000 initial coin offering in September 2020.
Despite efforts to innovate, the project could not generate steady profits. The team funded operations through personal contributions and token sales, but this approach is no longer working.
“The project has been funded through a combination of personal contributions from the project owner and token liquidations,” the team said via its X account. “Unfortunately, this model is no longer viable.”
Business got worse when Binance delisted the LINA token, causing a 65% drop in market value and leaving the company without enough resources to continue. Linear Finance said that due to this, important stakeholders decided to shut down the project and withdrew their positions.
As per the announcement, the team will soon provide users with clear instructions on handling their active positions and what to do next.
Before closing, Linear Finance had expanded into new areas, including a multi-chain perpetual decentralized exchange launched in December 2024. However, even with these efforts, the platform could not survive.
In september, 2023, Linear Finance was attacked, resulting in the draining of its stablecoin ℓUSD liquidity on PancakeSwap and Ascendex, causing the price to drop to zero. Shortly after, the protocol released a proposal to solve the problem created by the attack.
