Linear Finance – Unsurprisingly, many people feel alienated by the established financial system.
It’s not always easy for the average person to get their hands on it; in some cases, it’s downright inaccessible.
In addition, an increasing number of traders are looking to participate in the promising new asset class of cryptocurrencies, which are mostly inaccessible through the established monetary system.
But what if you could access cutting-edge digital and time-tested brick-and-mortar financial solutions in one convenient location? Now there is, and all due to Linear.
Looking into Linear (LINA) but have no idea what you’re doing or where to start? Don’t worry; this helpful guide will fill you in on all the endeavor details and have you ready to dive headfirst into the simplest trading environment on the market in no time.
What Is Linear?
As a cross-chain, decentralized protocol, Linear Finance is a game-changer in the world of finance.
The platform, the whitepaper claims, serves as a trustworthy gateway thanks to its support of bitcoin and its linking of centralized (Cefi) and decentralized (Dfi) financial systems (Defi).
Synthetic assets are the focus of Linear Finance, which is dedicated to their development, trading, and administration.
These assets are a hybrid of traditional financial derivatives and digital currencies.
Ultimately, the Linear platform aims to broaden participation in and access to traditional and digital tradable assets.
With the help of Linear Finance, investors can gain exposure to a wide variety of assets without having to wait for settlement or risk slippage.
For those who want a more simplistic explanation, the major goal of the Linear platform is to provide a user experience that is both scalable and fast by leveraging the cross-chain capabilities of the protocol.
The platform provides cross-chain compatibility and low transaction costs for trading tradable assets.
The platform’s native token can be used on several blockchains thanks to the platform’s bespoke swap functionality, which also helps reduce gas costs.
There is instantaneous finality and confirmation time for trading on the platform, allowing for a wide range of liquid assets based on spot cryptocurrencies, thematic indexes, and commodities.
Having the Linear pool available as a “decentralized counterparty” to every liquid exchange and so generating limitless liquidity for consumers is a crucial aspect of the platform.
The network is underpinned by an ERC-20-compliant token called LINA that was developed on the Ethereum blockchain.
Using LINA, token holders on the platform can vote on things like the platform’s distribution model, pledge ratio, the minimum listing requirements for assets, and more thanks to the company’s use of a governance token.
In order to increase the value of staking, the token uses an inflationary approach. Linear’s platform relies on the staking of LINA tokens.
How Does Linear Work?
Users can build Liquids with LINA tokens as the base collateral using this decentralized application for collateral pool and Liquids administration.
In the future, Buildr will accept a variety of digital assets, including LINA tokens, as collateral.
To help stabilize the LINA token economy, a minimum amount of non-LINA tokens will need to be deposited into the account before the collateral will be released.
To generate Liquids, the value of the collateral must surpass the value of the Liquids.
To fuel sustainable growth over the long term, the pledge ratio will start at 500%.
The LinearDAO can make adjustments to the pledge ratio that are decided by popular voting over time.
The Pledge ratio fluctuates with LINA price fluctuations.
Users can construct more Liquids when it goes up, but when it goes down, they have to stake more LINA or burn some of their Liquids to keep from going bankrupt.
The lUSD stablecoin utilized by the protocol is created by staking LINA in the Buildr decentralized application (dApp), which can then be traded on the exchange.
For example, switching exposure from the S&P 500 to Bitcoin would require days of settlements and wire transfers in the current financial system; the Exchange dApp intends to reduce this time drastically.
Blockchain technology allows for instant settlement of Liquids.
After acquiring lUSD on Buildr or another exchange, traders can use it on the Linear Exchange to purchase Liquid versions of assets, including cryptocurrencies, commodities, and indices, which offer infinite liquidity and no slippage.
Linear Exchange is not an order book-based system like other exchanges. Instead, users can directly trade with a debt pool underlying Linear’s smart contracts.
Although Linear Finance uses Ethereum’s resources, Liquids are created on other blockchains, which have far better throughput and cheaper transaction fees than Ethereum.
Furthermore, the possibility of frontrunning is reduced because the oracle providing the price feeds of underlying assets can refresh prices rapidly and at little cost.
Specifically designed to preserve compatibility and interoperability between distinct DeFi ecosystems, this bespoke dApp allows users to trade assets between chains.
Linear Swap was developed on Ethereum, and it now has integrations with Binance Smart Chain, and Polkadot is in the works.
Using gas-efficient token swaps, you may convert your LINA, lUSD, or Liquids to any other blockchain currency without spending a fortune.
This dApp generates yields for its users, allowing them to earn money without actively doing anything.
Users can earn interest in lUSD, BUSD, and LINA by staking LP tokens or lUSD.
Coin exchanges on Linear Exchange incur a transaction cost initially set at 0.25%, and this fee is used to fund a portion of the staking rewards.
More benefits for LINA participants result from token inflation.
Stakeholders who have a pledge ratio above the threshold receive both benefits weekly at a pro-rata rate.
Who Are The Founders of Linear?
In 2020, Kevin Tai and Drey Ng established Linear Finance after raising $1.8 million in startup funding.
Linear’s CEO, Tai, got his start in the tech industry after graduating from UC Berkeley.
He has spent over a decade working on collateralized debt and structured products for financial institutions like Credit Suisse and Standard Chartered, and he has overseen transactions totaling over $20 billion.
Ng, who has an M.S. in computer science, is the project’s chief technology officer.
He began his career in trade finance at Deutsche Bank and HSBC before shifting to blockchain to head up the product side of Liquefy, one of Asia’s major security token issuing firms.
Linear Finance’s Chief Marketing Officer, Aedreon Marshall, has been instrumental in establishing key cryptocurrency collaborations, and Lead Blockchain Developer Jonathan Lei has contributed to the EOS code base.
What Makes Linear Unique?
Linear’s primary contribution to the cryptocurrency industry is liquids, sometimes synthetic assets.
The Linear Finance team, comprised of experts in both blockchain technology and conventional finance, offers its customers a convenient platform from which they may acquire exposure to various digital and traditional financial products.
Linear is an early Ethereum-based DeFi project with cross-chain compatibility.
While the protocol uses Ethereum’s infrastructure, Liquids are created and traded on other blockchains, resulting in cheaper transaction costs and higher throughput than are often seen on Ethereum-hosted exchanges.
Linear Exchange is perfect for high-frequency traders that use algorithmic software due to its near-instant settlement.
However, employing a price oracle can avoid the front-running issue that plagues many initiatives like this.
How To a Choose a Linear Wallet
LINA, being an ERC-20 token, can be kept in any wallet compatible with the Ethereum network; however, the type of wallet you select will likely depend on your intended usage and the quantity of LINA you intend to keep there.
The safest way to keep cryptocurrency is in a cold storage wallet, also known as a hardware wallet, such as a Trezor or a Ledger.
They are more complicated and costly to implement, however.
Therefore, they may be more appropriate for more seasoned users to store substantial amounts of LINA.
Digital wallet software is another viable choice, and it’s completely free and simple to set up.
They can be either custodial or non-custodial and can be downloaded on a smartphone or computer.
Custodial wallets have private keys handled and backed up by the service provider.
The private keys for a non-custodial wallet are stored in the device’s secure element.
While convenient, software wallets are thought to be less secure than hardware wallets, therefore, they may be better suited for lesser quantities of LINA or inexperienced users.
Web wallets, also known as online wallets, are a convenient and secure way to store and transfer money between numerous web-enabled devices.
However, hot wallets are not as secure as their hardware or software counterparts, so use caution.
You should choose a trustworthy business with a proven track record in security and custody, as you will likely be entrusting the platform with the management of your LINA.
Because of this, they are best for those who regularly trade or who just need to store a modest quantity of cryptocurrency.