In the field of DeFi, the concept of synthetic assets has attracted widespread attention, and the leading project Synthetix has an absolute advantage. However, Linear Finance, a rising star that has attracted much attention recently, has become the focus of the market with its cross-chain technology and low-cost advantages. This article will explain to you the uniqueness of Linear Finance, as well as the role and potential of its token LINA.
What is Linear Finance?
Linear Finance is a cross-chain synthetic asset protocol that supports the creation of synthetic assets on different blockchains, similar to Synthetix. The so-called "synthetic assets" refer to digital assets that simulate the price of the target asset. For example, lUSD simulates the price of the US dollar and lBTC simulates the price of Bitcoin. When users buy lBTC, it means investing in BTC, thus opening the door for traditional financial assets and assets on different chains to enter DeFi.
Why do we need synthetic assets?
Synthetic assets can provide investors with more flexible investment opportunities on the blockchain, breaking the boundaries of traditional financial markets. For example, investors can invest in gold in DeFi with the help of synthetic assets by simulating gold prices; they can also participate in the price changes of crypto assets such as Bitcoin and Ethereum through synthetic assets such as lBTC or lETH. With the popularity of synthetic assets, the richness of DeFi investment portfolios continues to increase.
Differences between Linear Finance and Synthetix
Synthetix is currently the largest synthetic asset platform, but Linear Finance has achieved innovation in the following aspects:
Cross-chain compatibility
Synthetix relies on Ethereum, while Linear Finance is based on Binance Smart Chain (BSC), which is compatible with Ethereum Virtual Machine (EVM). Binance Smart Chain's low fees and faster transaction confirmation time (usually a few seconds) make Linear more friendly to retail investors, while on Ethereum, the transaction fee can be as high as tens of dollars and the confirmation time may exceed 10 minutes. In comparison, Linear Finance has greatly lowered the threshold for entering the synthetic asset market.Cross-chain partnerships
Linear Finance is not only compatible with Ethereum, but also cooperates with the public chain project Nervos CKB to jointly develop cross-chain asset solutions to further expand the cross-chain application prospects of DeFi.
What is the LINA token?
Linear Finance's native token LINA has two main uses:
Staking
Users can pledge LINA tokens to synthesize the stablecoin lUSD. Although the specific pledge rate has not yet been announced, referring to the pledge rate of Synthetix, it is speculated that the pledge rate of LINA may be above 500%, that is, staking $5 of LINA can generate $1 of lUSD. A higher pledge rate can effectively prevent the system from liquidating in a volatile market and provide users with higher security.Decentralized Governance
LINA tokens can also be used for the platform's DAO governance, and holders can vote on the platform's future development direction and important decisions. At present, the DAO governance function has not yet been officially launched, and more governance functions may be launched in the future.
LINA's market performance and future potential
According to recent data, the circulation of LINA tokens is 10 billion, and the current price is about $0.034. In the past 30 days, its increase is close to 200%. LINA has attracted widespread attention in the market with its convenient staking and cross-chain advantages.
Currently, Linear Finance’s synthetic asset selection includes 9 cryptocurrencies and 2 commodity synthetic assets, and plans to launch more types of synthetic assets in the future, such as stocks, forecasting assets, etc. These new features will further enrich the platform ecology and enhance the value support of LINA tokens.
Team Background and Financing
Linear Finance has also gained favor in the capital market. In September 2020, the project completed a private placement financing of US$1.8 million, with investors including top blockchain investment institutions such as NGC Ventures, Alameda Research, Hashed, CMS Holdings, Genesis Block and Kenetic Capital. Subsequently, Linear also received strategic investments from Bitmax and Huobi, and reached in-depth cooperation with Huobi to further expand market resources.
Team strength is also an important pillar of Linear Finance's development. Co-founder Wu Zhouyu founded Liquefy, Asia's largest securitization token issuance platform, and has extensive experience in blockchain interoperability. The core members of the team also graduated from well-known universities and have rich experience in blockchain technology and project management.
Linear Finance Future Prospects
Linear Finance is in its early stages of development. Although there are already leading projects such as Synthetix in the field of synthetic assets, Linear Finance has become a rising star with its cross-chain function and low-cost advantages. With the support of the team, funds and technology, Linear Finance is expected to create more investment opportunities in the DeFi field and help users easily build cross-chain investment portfolios.
Despite this, competition in the synthetic asset market remains fierce, and investors need to carefully assess risks. For investors who are optimistic about the prospects of DeFi and synthetic assets, LINA may be a potential project worth paying attention to.
