The Consensys-developed Linea network says it will become one of the first Ethereum layer-2 networks to commit to burning Ether as part of its network design, as it shared new details of its upcoming token generation event and airdrop.
Linea announced new staking and burning mechanisms for its upcoming token launch in an effort to become more aligned with the layer-1 blockchain, which it hopes will make the network the โhome for ETH capital,โ according to a statement sent to Cryptox.
The move comes amid growing concern that layer-2 networks have been leeching chain activity and fee income from the Ethereum mainnet.ย
A LINEA token generation event is set to take place later this year, with 85% of the token supply going to the ecosystem, and the remaining 15% will be allocated to the Consensys treasury under a five-year lockup.
When is the Linea token generation event?
Declan Fox, global product lead for Linea, told Cryptox that they did not have the exact date for the token generation event and would share airdrop criteria up to a week before the event.ย
A new staking mechanism, which is expected to be launched in October, will enable users to earn staking rewards even when they bridge Ether (ETH) to Linea. This makes the ETH productive as it can also be used for DeFi activities on the layer-2 network.ย
โLinea is the only L2 with total Ethereum compatibility, and we wanted the economics to be as aligned and supportive as the technology,โ said Joseph Lubin, founder and CEO of Consensys.
He explained that harvested staking rewards are distributed on Linea to DeFi protocols, boosting yield for active liquidity.ย
โThis creates a flywheel for attracting capital through sustainable incentives, where deeper liquidity drives more transaction volume, therefore attracting more deposits.โ
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Additionally, 20% of all Linea transaction fees will be used to burn ETH as the network becomes the first L2 to commit to burning the asset. The remaining 80% burns LINEA tokens, making them deflationary too.
Building the market shareย
Linea has just 1.23% of the rollup-based layer-2 market with an onchain value of around $513 million, according to L2beat.ย
Fox said that there are plans to expand this by building the Linea mainnet โto be the best chain for ETH capital at a time when the momentum behind ETH is very strong.โ
He added that Ether liquidity providers will find โthe best risk-adjusted return by bridging liquidity to Linea, thus growing the market share.โ
โThis, combined with the ecosystem of Consensys and distribution of MetaMask, will further attract users and builders to come and set up home on Linea digital real estate.โ
Ethereum-aligned consortiumย
Consensys also announced an Ethereum-aligned consortium that will manage the Ethereum ecosystem fund. Consortium members, in addition to Consensys, include Eigen Labs, ENS Labs, Status, and Joe Lubinโs ETH treasury gaming firm SharpLink.ย
โLineaโs commitment to Ethereum couldnโt be clearer, and we think the platformโs unique alignment with Ethereum will make it an important part of its future,โ said Joseph Chalom, the newly appointed co-CEO of SharpLink.ย
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