The Linea Token Launch Raises Doubts Over Purpose and Value

On September 10th, Linea tokens will be generated, giving the Ethereum project, which has been in existence for over two years, its own cryptocurrency. Interest is high, and Linea has its own concept.

Even before its stock market debut, Linea on X is making big promises: With the launch of the LINEA cryptocurrency, the most important token will enter the Ethereum ecosystem since ETH itself. On Wednesday (September 10th), an initial 9.36 billion LINEA will be distributed via airdrop to early users and prominent backers, while the team and venture investors are expected to miss out. The project has been live as Layer 2 of Ethereum since July 2023 and, according to data from DeFiLlama , has reached a TVL of just over $1.3 billion.

LINEA is expected to gain value through buybacks – but there is no use case

Unlike other Ethereum Layer-2 solutions like Arbitrum, Linea is not intended to be used as a means of payment for fees. Linea is also not intended as a self-governing governance token . The altcoin is intended to generate value by using collected Ethereum fees to buy back Linea and then burning it. Linea explains its allocations to Ethereum companies like Sharplink Gaming or Metamasket as “strengthening the ecosystem.”

Altcoins from Ethereum Layer-2 solutions have not prevailed

Whether the Linea concept will work is doubtful. Our analysis of Ethereum Layer 2 solutions from the end of August was not the only one to show that their cryptocurrencies are long past their prime.

According to L2Beat ‘s data , Linea ranks fourth by TVL, but far behind Base and Arbitrum. Coinbase’s Base has decided not to offer its own coin, thus shaking up the competition. Kraken has copied this solution with INK. So, anyone looking for an Ethereum Layer 2 doesn’t even need to buy another cryptocurrency.

Conclusion: Linea starts with question marks about its usefulness

One can’t help but get the impression that the Line project, as Layer 2 on Ethereum, has achieved quite a bit over the past two years. But why it needs a LINEA cryptocurrency now isn’t clear.

Even if the team isn’t directly rewarding itself with LINEA, major partners from EigenLabs to Metamask (ConsenSys) are receiving tokens, and there are no plans for private investors to have a say. If you don’t get your first Linea through the airdrop, we strongly recommend doing your own research.

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(Featured image by Shubham Dhage via Unsplash)

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