For several years now, the development of the Ethereum blockchain has been undergoing a proliferation of layer 2 solutions. These solutions offer a variety of strategies, such as the Linea version, which is determined to accompany the launch of its native token with returns applied to Ether (ETH).
Layer 2 Linea unveils the tokenomics of its LINEA token
The development of layer 2 solutions associated with the Ethereum blockchain has accelerated significantly in recent years. The aim is to provide an effective and functional decongestion valve, while deploying parallel blockchains based on its strength and resilience.
A true ecosystem within which the development company Consensys — best known as the creator of the MetaMask wallet — launched its Linea version at the end of last year. For the moment, this layer 2 does not yet have a native token, but its tokenomics has nevertheless just taken official shape, as part of a publication on the X network.
The LINEA token follows Ethereum’s Genesis distribution model and prioritizes the ecosystem by directing the majority of funds to users, developers, Ethereum public goods, and research & development. 85% of its supply will be reserved for the ecosystem (including 75% for a development fund + 10% for early users) and 15% for Consensys’ treasury (locked for 5 years).
Linea
At the same time, the Linea layer 2 presents itself as an extension of the Ethereum blockchain, designed to “amplify its security and support its monetary logic.” This is why a “pioneering new approach” has just been unveiled to build “a model that is deeply aligned with Ethereum, both technologically and economically.”
A new standard that brings value back to Ethereum
The Linea layer 2 is closely linked to the development of its layer 1. As a result, every decision made within its architecture, such as the transaction fee (gas) mechanism, tokenomics, and governance, will serve to bring value back to Ethereum.
Today, we are setting a new standard for Ethereum layer 2s. We are introducing native ETH yield, protocol-level ETH burn, and an Ethereum-native Consortium to manage the largest ecosystem fund in the industry.
Linea
In practice, this new standard applied to Linea revolves around three key points, designed to “create a direct economic link between the use of the blockchain and the accumulation of value for ETH and the LINEA token”:
- Burn 20% of all net transaction fees (paid in ETH) to reduce the supply of Ether;
- Use the remaining 80% to burn LINEA tokens, with a deflationary purpose;
- Staking rewards for ETH deposits distributed to liquidity providers (LPs).
Finally, the distribution and management of the majority of LINEA tokens will depend on a structure called the Linea Consortium, composed of iconic players in the Ethereum ecosystem, such as Consensys, Eigen Labs, Ethereum Name Service (ENS) and Sharplink Gaming. The goal is to make this layer 2 “the most natural extension and the most powerful accelerator of Ethereum.”
