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Linear Finance $LINA: A Delta-One Asset Protocol

The decentralized finance (DeFi) landscape continues to see the entrance of new services to help support and maintain a high growth rate. The latest addition to this space is Linear Finance. From a distance, this project makes it easy to transition from traditional finance to DeFi-powered platforms. With the birth of these new platforms, the […]

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The decentralized finance (DeFi) landscape continues to see the entrance of new services to help support and maintain a high growth rate. The latest addition to this space is Linear Finance. From a distance, this project makes it easy to transition from traditional finance to DeFi-powered platforms.

With the birth of these new platforms, the major hindrance to their uptake has been smoothly convincing those accustomed to traditional finance that the other side actually looks greener.

Table of Contents

Background

Drey Ng

The project is led by Drey Ng and Kevin Tai. Drey has a Master of Science in Computer Science from the University of Hong Kong. He also happens to be the chief product officer at Liquefy, a technology solutions company guiding innovative businesses through digitization and blockchain technology.

Kevin Tai

Kevin has a Master of Business Administration in Corporate Finance and Real Estate from Harvard Business School. His past roles include being vice president of structured products at Credit Suisse.

Linear Finance seeks to reconcile traditional finance with distributed finance. Its core areas revolve around having a Delta-one approach to synthetic assets.

What is Linear Finance?

Linear is a distributed protocol that is compatible with multiple chains and majors with synthetic assets. Its platform is non-custodial and works towards democratizing and enhancing inclusiveness to both traditional and digital investment assets. One of the ways the project achieves this is by enabling investors to save on transaction fees and reduce the time it takes to bring an investment position to life.

Also, Linear guards investors against high asset prices by providing them with fair market value. The network is built on Ethereum with activities on the platform powered by LINA, an ERC-20 token. With most DeFi platforms built on the Ethereum blockchain, the protocol maintains access to this ecosystem by building synthetic assets on chains that are EVM (Ethereum Virtual Machine) compatible like Binance Smart Chain (BSC).

The project’s white paper stresses on delta-one and synthetic assets. With the project dealing with derivatives, delta-one means that a change in the price of the underlying asset ignites the same change to the product.

Synthetic, on the other hand, are assets that derive their value from other assets. Examples of synthetics include futures and options. In the crypto world, synthetic assets enable investors to interact with cryptocurrencies without necessarily holding them.

These assets are also known as liquids because they can easily be converted to cash. The Linear protocol supports liquids in cryptocurrencies, crude oil, coffee, market indices, e-sports, among others (see below).

Use cases of Linear Finance

Layer two scaling solution

The Majority of DeFi systems tend to use Ethereum. However, other established blockchains are striving to get a piece of the pie. But, with the incompatibility among decentralized systems, there’s a need for a bridge.

Linear acts as the chain that brings all the networks together. As a layer two solution, the protocol can connect all the major chains while mitigating the risks involved in such a process.

By providing cross-compatibility, the project can offer:

  1. Low gas fees
  2. High transaction speeds
  3. Fast price discovery

Low Gas Fees

Since transactions are not directly done on the Ethereum blockchain, the decentralized delta-one protocol estimates that its users save up to 90 percent on gas fees when using the network.

High Transaction Speeds

Transactions done on the Linear protocol, from retrieving, staking, buying, to burning have near-instant settlements. Also, the protocol is ideal for use in circumstances where failed transactions should be avoided.

Fast Price Discovery

The platform employs oracles with block times of mere seconds. This allows traders and users to interact with fresh prices in real-time. Consequently, there is fairness, safety, and transparency among users.

Linear Finance Token (LINA)

LINA is used on the network to back collateralized debts, as well as physical and digital assets. Holders of the token can access Linear USD (LUSD) which can be used to interact with Linear liquids on the Linear exchange. Additionally, token holders contribute to governance decisions such as which assets to be listed, and distribution models.

Other uses of LINA include, but are not limited to:

Base Collateral

The token is used as the base collateral when creating synthetic assets using Buildr, a blockchain-based platform for managing liquids. While the collateral needs to be a different cryptocurrency such as Ether (ETH), Linear takes a hybrid approach where 80 percent of the collateral consists of LINA and 20 percent is Ether or any other cryptocurrency.

Earning Staking Rewards

LINA stakers earn rewards on either pro-rata exchange fees or an inflationary reward basis. For the first option, the rewards are attained on a weekly basis, and the calculation is done while considering the stakers’ pledge ratio.

Other ways stakers earn rewards are via yield farming, a positive variation of the pledge ratio, and providing liquidity on the Linear pool.

Linear Finance and Tellor

Linear is working with Tellor to implement Ethereum oracles. Simply put, an oracle provides verified external data to a smart contract.

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Tellor uses this to provide high-value off-chain data through hashing and data signing. Tellor recently launched on the Linear network. Teams from both platforms are working to ensure the security of LINA and other crypto prices on the Ethereum platform.

Linear.Exchange

The exchange powers the trading of various synthetic assets. It has almost-instant transaction times with the help of blockchain technology. Linear.Exchange utilizes the infrastructure of Ethereum and the high transaction-times of other decentralized systems.

Furthermore, it supports commodities, cryptocurrencies, market indices, foreign exchanges, thematic exposures, and looks to expand to the equities market. This array of offerings not only minimizes the risk involved in investing in cross-assets but also increases the choices of investable assets. It provides users with the ability to manage their own exposures plus an added functionality for analytics.

LinearDAO

Linear is governed by a distributed autonomous organization (DAO) known as LinearDAO. It is responsible for handling essential platform designs, as well as system parameters like LINA rewards and frequency, pledge ratio, the introduction of new functionality, technology roadmap, and split of transaction fees.

Conclusion

As more projects strive to make the DeFi world more attractive to those in crypto and traditional finance, Linear Finance has already made a dent in the space. Offering a complete platform including an exchange with cross-chain compatibility, the protocol brings a major difference in the DeFi scene.

Furthermore, its low fees, high transaction times, and fast price discovery allow users to have a real-time connection with their tracked assets. Its delta-one approach means that traders get the absolute value of the underlying asset since there is a one-to-one connection to value and/or price movement.

Source: https://www.asiacryptotoday.com/linear-finance/

Blockchain

Kraken to Double its Valuation to $10 Billion via Funding Round

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The veteran US-based cryptocurrency exchange Kraken is reportedly in talks to raise more than $5 billion and double its valuation to over $10 billion. Some of the giant names potentially participating in the latest funding round include Fidelity, General Atlantic, and Tribe Capital.

Kraken to Increase its Valuation to $10B?

Based in San Francisco, California, Kraken is among the oldest cryptocurrency exchange with nearly ten years of experience. The company could be on its way to more than double its valuation, according to a recent Bloomberg report.

Citing people familiar with the matter, the coverage reads that Kraken is currently in talks with prominent names such as Fidelity, Tribe Capital, and General Atlantic to secure the substantial amount.

If the exchange indeed proceeds with the funding now, this would be the first such round in almost two years. Back in 2019, Kraken employed the crypto-friendly investment platform Bank to the Future and raised more than $13 million at a $4 billion valuation. Interestingly, more than 2,000 parties participated in that round.

While Kraken reportedly dabbles with the idea of raising more money through a funding round, another giant US-based exchange, Coinbase, plans to go public through a direct listing.

Kraken to Investigate Market Price Drops

Earlier this week, BTC and the rest of the crypto market plummeted in value by 20% or more. The primary cryptocurrency dropped from a high of $58,400 to a low of $44,000 and still struggles to recover.

Ethereum also went through a significant downfall as it nosedived from $2,050 to about $1,350. However, there was a flash crash on Kraken, which saw ETH’s price dumping to approximately $700 on the exchange alone.

Naturally, Ethereum investors utilizing the platform weren’t happy as such developments could cause substantial financial losses. Kraken’s CEO Jesse Powell recently gave an interview where he addressed the situation and said that the company will investigate it:

“There were some large dips on Kraken, which we think were probably exacerbated by the availability of margin trading on Kraken and the availability of some advanced order types like stop orders, which many other exchanges don’t have.

We are not really sure why, but we are in the process of investing this – why the volume was greater on Kraken or why there was more cell pressure on Kraken relative to its peers.”

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Source: https://cryptopotato.com/kraken-to-double-its-valuation-to-10-billion-via-funding-round/

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Blockchain

Cardano, SUSHI, FTX Token Price Analysis: 27 February

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Cardano took its new position as the third-largest cryptocurrency by market cap after it touched a valuation of $1.39 on the charts with a market capitalization of $43.7 billion. SUSHI was trading at its range highs once more, with its previous move past $15.9 highlighting some areas to take-profit at. Finally, FTX Token saw some indecision around the $28-mark, with its trading volume declining as well.

Cardano [ADA]

Cardano, SushiSwap, FTX Token Price Analysis: 27 February

Source: ADA/USDT on TradingView

ADA moved north strongly past the previous local high at $1.2. The Fibonacci Retracement tool for ADA’s move up to $1.2 from $0.68 presented a 27% extension level target of $1.39 for ADA, with a 62% extension level found at $1.69.

Some of the levels of support for ADA plotted can be expected to serve as support on a retracement. The MACD showed strong bullish momentum behind ADA, and although it was overbought in the short-term, a pullback had not yet been signaled. Hence, the $1.39 and $1.5 levels are ones to watch out for.

Finally, the trading volume had declined somewhat, when compared to the surge to $1.25, and this could be an early sign of a shift in market sentiment.

SushiSwap [SUSHI]

Cardano, SushiSwap, FTX Token Price Analysis: 27 February

Source: SUSHI/USDT on TradingView

Since early February, the range from $12.3 to $15.9 has been one the price has respected and attempted to break out to the upside of. These breakouts have presented levels that might once more pose resistance to another move north for SUSHI.

In the short-term, testing the range highs once again would be a bullish development. If the $15.9-$16 level is flipped to support, it is likely that SUSHI will move higher to test $17.1 as resistance. The RSI showed bullish momentum behind SUSHI with a value of 58 on the hourly chart, with the same staying above 50 over the past couple of days.

FTX Token [FTT]

Cardano, SushiSwap, FTX Token Price Analysis: 27 February

Source: FTT/USD on TradingView

FTT registered declining trading volume, with the Awesome Oscillator also noting weak momentum behind FTT. FTT formed a triple top at $34 over the past week and fell to test $26, a level which stood firm against selling pressure on multiple tests as well.

At the time of writing, the $26-area would be a good place to set buy orders at, with a stop-loss set at $25.5 or slightly lower. This would represent a good risk-to-reward trade, although the momentum and trading volume of FTT needs to be assessed on another test of the $26-region.


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Source: https://ambcrypto.com/cardano-sushi-ftx-token-price-analysis-27-february

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‘Bitcoin Doesn’t Behave Like A Payment Instrument’, Says Mastercard’s Vice-Chair

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'Bitcoin Doesn’t Behave Like A Payment Instrument', Mastercard's Vice-Chair Says

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Mastercard may have warmed up to cryptocurrencies recently, but if you’re expecting to use your debit cards to pay for your coffee, an executive at the payments giant has bad news for you. Ann Cairns, the executive vice chair at Mastercard stated in a recent conference that Bitcoin is too volatile for the company.

Mastercard announced earlier this month it would incorporate digital currencies into its payments. As ZyCrypto revealed at the time, this would avail cryptos to Mastercard’s one billion users. It would allow them to pay using cryptos at over 30 million merchants worldwide.

“MasterCard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants, and businesses to move digital value — traditional or crypto — however, they want,” the firm stated at the time.

However, according to Cairns, the New York-based giant is not about to incorporate Bitcoin. Speaking at the Future of Money conference, Cairns criticized the use of BTC for payments due to its long confirmation times.

She told the audience, “Bitcoin doesn’t behave like a payment instrument. It’s too volatile and it takes too long to transact.”

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She added, “So if you and I went for a cup of coffee, and you know, I decided to pay with bitcoin, our coffee might cost me, I don’t know, 40% more by the time it was served — and it takes 10 minutes to actually settle the transaction.”

While she may have exaggerated the volatility, Bitcoin is indeed a volatile currency. In the past 48 hours, its price has ranged from $51,266 to $44,710, a 12% variation. The top crypto is currently trading at $46,907.

'Bitcoin Doesn’t Behave Like A Payment Instrument', Says Mastercard's Vice Chair
BTCUSD Chart By TradingView

Bitcoin Is a Store of Value, Not a Currency

Cairns went on to state that she sees Bitcoin as an asset class, drawing comparisons with gold. This comparison has persisted over the years, with Bitcoin becoming known as digital gold.

In a recent report, JPMorgan revealed that Bitcoin is indeed competing with gold as a safe haven asset. This narrative has been largely boosted by companies like MicroStrategy and Tesla which have invested billions of dollars in the crypto.

As per the bank’s report, investors are moving into Bitcoin as a hedge against inflation and an alternative to a depreciating dollar. The bank believes that if it could take over a fraction of gold’s market appeal, Bitcoin could shoot up to $146,000.

“Bitcoin’s competition with gold has already started in our mind. Considering how big the financial investment into gold is, a crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term.”

Others like Meltem Demirors, the chief strategy officer at London-based CoinShares, believes Bitcoin will outpace gold. She recently claimed that Bitcoin’s market cap will far exceed that of gold. This is despite gold’s market cap being over 10 times bigger than Bitcoin’s.


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DISCLAIMER Read More

The views expressed in the article are wholly those of the author and do not represent those of, nor should they be attributed to, ZyCrypto. This article is not meant to give financial advice. Please carry out your own research before investing in any of the various cryptocurrencies available.

Source: https://zycrypto.com/bitcoin-doesnt-behave-like-a-payment-instrument-says-mastercards-vice-chair/

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