Linear Finance Shuts Down After Nearly Five Years of Trading

Linear Finance is shutting down after nearly five years of trading due to profitability obstacles and a sudden drop in the market capitalization of its native token last week.

Linear Finance is shutting down after nearly five years of trading, as the protocol faces profitability obstacles and a sudden drop in the market capitalization of its native token last week.

The DeFi protocol has "struggled to generate sustainable returns" since its initial launch, a Thursday announcement read.

"The project has been funded through a combination of personal contributions from the project owner and token liquidations. Unfortunately, this model is no longer viable."

Linear Finance offered exposure to real-world assets (RWAs) like commodities and forex markets through a crypto asset class called “Synthetics” or “Liquids.” These tokens allowed users to invest in RWAs via a decentralized platform without directly holding the underlying assets. Users could also buy LINA, the project’s native token, used as collateral to mint Linear’s native stablecoin LUSD and participate in governance decisions.

On March 21, Binance announced LINA’s delisting, along with four other digital assets. The delisting was scheduled to take full effect on March 28. According to the protocol’s response on Telegram when it was announced, Linear Finance had no prior warning of the decision.

"The recent decision by Binance to delist the LINA token accelerated these challenges, resulting in a 65% reduction in market capitalization and a significant loss of the remaining operational runway," Linear Finance said on March 27. According to the protocol, the decision to wind down operations was made "after careful consideration."

LINA’s market cap fell from about $14 million around March 21 to under $6 million at press time. The token was down over 23% as of writing, according to The Block's price page.

Linear Finance added that it would provide an update on the plans for winding down the protocol and returning remaining value to LINA token holders.

Earlier this month, Linear Finance announced that it would be suspending the synthesis of new Liquids and close all running Liquid markets. The protocol also announced that it would no longer be accepting new contributions to the Linear Ecosystem Fund.

Linear Finance is shutting down after nearly five years of trading. The protocol, which launched in 2018, was funded through a combination of personal contributions from the project owner and token liquidations. However, Linear says it faced an "ongoing challenge" to generate sustainable returns from its protocol.

Linear offers exposure to real-world assets (RWAs) like commodities and forex markets through a crypto asset class called “Synthetics” or “Liquids.” These tokens allowed users to invest in RWAs via a decentralized platform without directly holding the underlying assets. Users could also buy LINA, the project’s native token, used as collateral to mint Linear’s native stablecoin LUSD and participate in governance decisions.

In a recent interview with Blockfolio founder and CEO, Ben Phillips, on the "Impact Investing" podcast, Linear founder and CEO, Simon Bogart, spoke about the importance of investing in protocols that are aligned with an investor's values.

"I think it's really important for people to be investing in protocols and projects that they believe in and that are making a positive impact on the world," said Phillips.

Linear also faced a setback last week after Binance announced the upcoming delisting of the LINA token, along with four other digital assets. The delisting was scheduled to take full effect on March 28. According to the protocol’s response on Telegram when it was announced, Linear Finance had no prior warning of the decision.

"Recently, Binance has made the decision to delist the LINA token, which will come into effect on March 28," Binance announced. "The LINA token will be delisted from trading at 3 PM (UTC) on March 28. After the delisting, users will no longer be able to deposit or withdraw LINA on Binance, and the LINA/USDT trading pair will be closed."

"We understand that this news may be disappointing to some users, and we apologize for any inconvenience it may cause."

Linear confirmed the delisting in a Telegram post on March 21. "We have no prior notice of this decision and are actively working to understand the implications."

"This decision comes at a critical time for Linear as we are actively seeking new strategic partnerships to continue the project in a sustainable manner. The delisting from Binance will significantly impact the liquidity and visibility of the LINA token, which in turn will affect the project's ability to attract new users and contributors."

Following the announcement of the delisting, the market capitalization of the LINA token dropped by 65%.

"This will further impact Linear's operational runway and ability to continue operating at its current capacity."

Linear said it was exploring all options to mitigate the consequences of the delisting and ensure the best possible outcome for LINA token holders.

"We are committed to keeping our community informed of any significant developments."