The Big Whale: You're about to experience a major turning point with Linea with the launch of the token. How do you feel as this moment approaches?
Declan Fox: I'm obviously very excited, this launch is a pivotal moment for Linea. We've been working for over a year to refine our model, test our infrastructure and gather a strong community around our vision. What we are unveiling goes far beyond a simple airdrop or token launch. It's a long-term proposition for the Ethereum ecosystem.
We wanted to design Linea as a natural extension of the Ethereum ecosystem, not just another L2. Alignment with Ethereum is our compass. That's why we've set up an architecture that directly benefits Layer 1, in particular via an ETH burn mechanism, a community-centric tokenomic, and a yield strategy on ETH deposits that feeds DeFi activity on L2.
Fairly, can you explain in detail how this native yield on ETH deposits bridged on Linea works?
When a user uses Linea's native bridge to transfer ETH to our network, these funds are automatically staked via Lido V3, which will be our launch partner. Lido V3 makes it possible to delegate ETH to institutional validators without using liquid staking tokens, which greatly limits the risks of liquidity or exposure to a secondary token. It is a non-custodial model, which relies on the robustness of the Ethereum infrastructure.
But this return will not be distributed passively. The idea is to create a virtuous circle between staking, DeFi and economic activity on Linea. The return generated is placed in a fund that will then be used to reward users who mobilise their ETH on L2, whether by providing liquidity on Etherex (the network's new main DEX resulting from the migration of Nile Exchange, editor's note), by depositing on Aave or via other selected applications. This is a conscious choice: only active users, who participate in the growth of the ecosystem, will benefit from this return. It's a way of encouraging productive use of on-chain capital.
What if a user doesn't want to use their ETH in DeFi? Can they still keep their ETH on Linea?
Yes, of course. Users are under no obligation to commit their capital to DeFi if they do not wish to do so. He can very well hold ETH on Linea passively. But in that case, they will not receive a return. It's an operation that faithfully reflects the principles of the current Ethereum ecosystem, where only by putting capital into activity can yield be generated.
Also, for users who want to exit Linea quickly, we will be offering a quick withdrawal option via Lido's liquid staking tokens, which will bypass the classic bridge delay. This gives more flexibility without compromising the security of the main protocol.
You mentioned that only certain DeFi applications will capture this yield. What will they be?
At this stage, we have identified a few strategic applications, including Etherex, our native DEX, as well as Aave. These platforms will enable users to benefit from a bonus based on the return generated in L1. A committee, attached to the Linea consortium, will oversee the allocation of these bonuses. This governance will be able to evolve over time to adapt to the dynamics of the network and redirect flows towards the apps with the greatest impact.
The aim is to encourage healthy, targeted growth. The aim is not to dilute this return across a multitude of apps, but to create powerful network effects on the pillars of the ecosystem. This will give us greater control over capital allocation and accelerate the emergence of a genuine institutional market for Linea.
>> DeFi on Ethereum: State of play and outlook
"80% of transaction fees will be used to burn LINEA, the remaining 20% will be used to burn ETH" What exactly will be the role of the LINEA token?
The LINEA token is at the heart of our business model. It will not initially be used to pay for transactions, even though the account abstraction will technically make this possible. Its usefulness lies primarily in its direct link with network activity. In practical terms, each transaction on Linea will generate charges. 80% of these costs will be used to buy back and burn LINEA. This means that the more the network is used, the rarer the token becomes. The remaining 20% will be used to burn ETH to strengthen alignment with L1.
In the long term, other use cases could emerge, such as staking or governance, but this will be a decision for the consortium overseeing the protocol. We wanted to avoid the pitfall of an artificial utility token. The LINEA token must be a proxy for real economic activity on the chain, and not just a transaction currency.
Tell us about the consortium. What is its structure and who is part of it?
The Linea consortium is a not-for-profit entity under US (Delaware) law, designed to steer governance in a structured and efficient way. Its founding members are Consensys, Sharplink, EigenLabs, ENS Labs and Status. They are "stewards" of the Ethereum ecosystem, entities recognised for their commitment to decentralisation and innovation on L1.
This consortium replaces the traditional DAO model. There will be a central board responsible for steering major policy directions, including cash allocation, and advisory committees in charge of day-to-day operations, such as grants or partnerships. This model allows for rigorous governance while retaining a degree of agility, which is essential for managing such a complex ecosystem.
There have been rumours about the presence of the Ethereum Foundation. Why hasn't it joined yet?
The Ethereum Foundation is obviously a central player in the ecosystem. We hope it will join us as a steward. But these processes take time. You have to build a relationship of trust, align objectives, and sometimes just wait for timetables to align. The consortium is designed to welcome new members gradually, depending on their commitment and credibility in the Ethereum ecosystem.
Some sources have mentioned the future presence of a payment giant. Who is it?
I can't reveal its name yet, but we have started discussions with several financial institutions, banks and PSPs that want to connect to Ethereum. Linea plays a key role here, as an institutional gateway. Our EVM compatibility, clear governance and alignment with Ethereum make it a reassuring L2 for these traditional players.
We will probably see these big names arrive on Linea in the coming months, whether via integrations, investments or payment projects. The bridge between traditional finance and Ethereum passes through Linea.
"The launch of the LINEA token is imminent" If you had to compare yourself to other L2s, what would you say is the main difference?
The major difference is that Linea is designed as the most efficient chain for ETH capital. Where other L2s design their model around their own token, we have built Linea as a direct extension of Ethereum, with an ETH burn mechanism and tokenomics modelled on Ethereum Genesis: 15% for the "central treasury" (in this case ConsenSys) and 85% for the ecosystem.
We are also founded by Consensys, one of the historical pillars of the Ethereum ecosystem. This gives us legitimacy and a responsibility: to ensure that Ethereum succeeds. Linea is not an attempt to capture value at the expense of L1. It's an L2 that plays collectively.
>> Layers 2 Ethereum: state of play and challenges
Let's talk about the airdrop, why not communicate a specific date for the TGE?
The process of launching a token is complex, especially with a model as ambitious as the one we've designed. Many players are involved (whether technical partners, market makers, or exchanges) and we have to make sure that everything is perfectly aligned before announcing a definitive date. That said, the launch is imminent. We will first put the airdrop checker online, and then the TGE (Token Generation Event) will quickly follow.
The approach we have chosen is cautious but deliberate. The idea is to do things right, just once. You don't launch a token twice, and we wanted the structure we're putting in place to last for ten or twenty years. That's also why we took the time to consult all the stakeholders, gather feedback and iterate on the design. The result, I think, is more than worth it.
The airdrop will distribute 10% of the offer to early adopters. Why this figure?
This 10% is reserved for the early users and builders of the Linea ecosystem. It's a sign of recognition for those who supported the project even before it had a token. This percentage allows us to give a big thank you without unbalancing the distribution. There have been many farming campaigns over the last two years, and we wanted to create fairness between contributors, while sending a serious signal: this airdrop is not a simple marketing operation.
This choice also refers to a historical precedent: when Ethereum was launched, 10% of the offering was reserved for the foundation. In our case, it's 10% for the community and 15% for ConsenSys (with a five-year lockup), which is unprecedented in the L2 world. So we have a very strong alignment over the long term.
"Airdrop is just a catalyst: if the product is weak, the hype immediately falls back" What lessons have you learned from previous airdrop failures on other L2s?
In our view, the most important thing remains to build a solid product. The airdrop is just a catalyst: if the product is weak, the hype will die down straight away. On the other hand, if you offer a robust infrastructure with unique features, such as our yield mechanism or the ETH/LINEA double burn, the airdrop becomes a springboard for sustainable momentum.
We also wanted to avoid governance mistakes. Many L2s have opted for very broad DAOs that are difficult to manoeuvre. We opted for a tighter model with the consortium, to retain agility and be able to react quickly while guaranteeing rigour in resource allocation.
>> The hidden business of airdrops: between mirage and reality
You are among the last to launch your token. Is this a handicap?
On the contrary. We've taken the time to learn from others. Many L2s launched their tokens too early, sometimes in a hurry, without a clear business model. We were able to observe, iterate and correct. And today, we are launching a network with a mature architecture, solid tokenomics, and appropriate governance.
Linea is designed to last for decades. It's not a fad. It's strategic infrastructure for Ethereum. And if others want to draw inspiration from it, so much the better. We hope that our approach will become a standard, and that it will help the entire ecosystem to evolve towards greater maturity.
How will the 15% allocated to Consensys be used?
These tokens will be subject to a five-year lockup. They are non-transferable during this period. This means that they cannot be sold or moved. They may eventually be used as collateral in certain DeFi strategies or to provide liquidity, but this will be done in a totally transparent manner.
This is a strong commitment on the part of Consensys. This is not just an opportunistic airdrop to maximise a valuation. It's a way of showing that we're here to support Linea over the long term, and that our aim is to create a network that will be of lasting use to Ethereum.
"Sharplink? Linea is the natural place for such capital to become productive" How is this strategy perceived internally at Consensys, particularly because employees will not have an allocation?
At Consensys, we are lucky enough to be able to align incentives in a different way: via equity. The idea is simple: if Linea succeeds, it strengthens Ethereum. And if Ethereum strengthens, the valuation of Consensys increases. This mechanism creates a healthy and virtuous incentive loop.
With MetaMask, Infura and now Sharplink, we have a suite of tools that enable robust solutions to be deployed on Linea. And with a clear business model, credible governance, and a tokenomic consistent with Ethereum, we believe Linea can become the default network for players looking for security, EVM compatibility and transparency.
Fairly, you mention Sharplink. What role will they play on Linea?
Sharplink is a strategic player for us, as it is for the Ethereum ecosystem as a whole. Their ETH-based cash strategy is unprecedented, and Linea is the natural place for such capital to become productive. Thanks to our native yield-generating bridge, our burn mechanism, and our DeFi tools like Etherex, Sharplink will be able to optimise its exposure while contributing to the network's growth.
But beyond Sharplink, a whole section of the Ethereum Treasury Companies ecosystem could be heading to Linea. We offer a rare combination: real return, institutional security and a direct impact on ETH value. For a player like Sharplink, this is a proposition that's hard to ignore.
>> Sharplink, the arm of Consensys and Linea
Etherex is presented as a pillar of the project. What can you tell us about this DEX?
Etherex is our native DEX, designed to become the liquidity hub for Linea and ConsenSys. Technically, it is based on an X33 model, an evolution of the V33 found on Aerodrome or Velodrome. This model is more capital efficient, simpler to use for institutional LPs, and allows passive management of positions with a good return.
Etherex will have its own token, the REX, with a staked version called xREX. The aim is to quickly reach several billion dollars in TVL and trading volume, drawing on all Consensys flows, but also external partners. This is a DEX designed for the long term, with strong governance and aligned incentives.
>> Read Linea's fundamental analysis
