A few days ago, Layer 2 Linea launched its LINEA token, accompanied by a massive airdrop. The outcome of this operation mirrored the disappointment of its community, faced with a plummeting price, but the project leaders have not said their last word.
LINEA: a complicated launch
The Linea layer 2 recently launched its native cryptocurrency, LINEA, accompanied by an airdrop of more than 9 billion tokens to its early users. This was a highly anticipated operation, following a prolonged points campaign.
The project managers announced with great fanfare the arrival of “the most important token to enter the ecosystem since ETH itself.” And it must be admitted that a few days later, this statement sounds like an unpleasant squeak in the ears of its holders.
Indeed, the price of the LINEA token is currently down 50% from its peak on September 10, at around $0.046, with a market capitalization of just over $360 million.
At the same time, the Linea blockchain has just experienced another “temporary disruption,” following a similar incident just hours before the launch of its Token Generation Event (TGE) on November 10.
A burn financed by 80% of net profits
This is a complicated situation, but the project managers seem determined to respond. Product manager Declan Fox has just revealed a burn procedure linked to the long-term development of the LINEA token.
The goal? To use 80% of the blockchain’s excess fees to buy back tokens on the market and destroy them permanently, as part of an operation to “strengthen the robustness of Ethereum and ETH” involving three separate procedures:
- All gas fees on the blockchain are paid in ETH;
- Burn 20% of net profits in ETH to reduce the supply of ETH.
- Use 80% of net profits in ETH to burn LINEA, thereby reducing its supply.
Meanwhile, Joseph Lubin, the founder of Linea and co-founder of Ethereum, said earlier that holding the crypto could eventually pave the way for airdrop distributions—which is not a real use case for a crypto.
This burn procedure attempts to create a virtuous circle designed to encourage airdrop recipients and other LINEA token holders to use its blockchain so that the revenue generated increases the price of the token through scarcity.
However, its value will need to remain high enough to make it worthwhile.
