Linear Finance (LINA) was listed on TomoDEX on 21 October, 2020 under LINA/USDT trading pair. Now this time, Kevin decided to take his time to share with us a bit more about their project and their approach to adding value to the DeFi realm by leveraging the power of synthetic assets.
Below is a summary of the AMA.
Host: Can you please us a brief introduction of yourself and your Co-Founder Drey?
Kevin: I come from a traditional finance background but started my journey in crypto as a miner. I mined with FPGA’s and was heavily involved in the community building Bitstream’s. But during that time I began investing in a number of promising crypto projects. Over the last 1.5 years, I have been heavily invested in DeFi coins and using DeFi dapps as I see the true value and how revolutionary it is in terms of being able to dis intermediate financial markets and it’s middlemen. I started my career in Silicon Valley doing M&A for enterprise/mobile software companies, went to business school and then spent the last +13 years doing collateralized debt and structured products for bulge bracket banks in Asia.
My Co-Founder Drey, background includes both banking in trade finance and trading floor doing FX and rates, and leading the product side of one of the largest Security Token Offering companies in Asia called Liquefy. He’s led multiple tokenization projects with one of the largest real estate families in Asia, hedge funds and semi-government bodies. His vision since transition from banking to blockchain/crypto has been to disrupt the traditional banking system and offer permissionless financial asset access for the mass public. That’s exactly what DeFi is trying to solve and how Drey and I got started. Drey leads the product development at Linear and brings to the table a wealth of experience of banking and finance and creating institutional-ready products with interoperability on blockchains such as Ethereum, Quorum, and NEO, focusing on high throughput, security, and scalability.
Host: Please provide more details on Linear Finance and why the DeFi world needs yet another synthetic asset protocol?
Kevin: DeFi is extremely powerful, disruptive, and has the potential to revolutionize the entire financial industry. The global commodities market is ~20 Trillion USD and the global ETF market is 4–5 Trillion USD and growing. These markets are filled with middlemen and more often than not inaccessible to many investors. Linear is creating synthetic versions of commonly traded assets, allowing traders all around the world to trade efficiently and disintermediating middlemen.
But, we also aim to improve our DeFi ecosystem. DeFi is fraught with the same friction that plagued our traditional finance systems. Friction such as long settlement/transaction times, high transaction fees, and asymmetric information that turns away users/traders like ourselves. This is particularly relevant in synthetic asset protocols where user interaction is high.
This is why we built Linear Finance, the first cross-chain compatible, decentralized synthetic asset exchange with creative investable synthetic assets, unlimited liquidity, and no slippage. We use our cross-chain integrations as an imminent L2 solution to scaling/high gas fees and as a result, Linear Finance is fast, easy, cost-effective, safe, and ready to use for ALL users, ranging from new digital asset entrants to experienced crypto traders.
Host: As you just mentioned cross-chain compatibility, could you elaborate a bit more on that? LINA is ETH basd to start with, but what other chains will you support?
Kevin: Here’s how we view cross-chain compatibility working on Linear Finance.
Speed / scalability issues are solved because all the smart contract logic such as building ℓ USD (Linear’s synthetic USD) and trading for synthetic asset exposure (Liquids) can be done on EVM-compatible chains such as BSC (and other partner chains), with a much higher TPS, low block time, and much less gas fees. This means your transactions are faster and cheaper and price discovery is fast so you don’t get frontrun.
Increased composability and usability for users. Even though LINA is ERC-20 based, users can acquire LINA tokens in all the supported chains, use Linear Finance to conduct their transactions and subsequently move their assets to any of our supported chains, further increasing interoperability. Even with wallets, users can use the same Metamask for storing BSC’s coins and synthetic exposure by changing the RPC link. Not only is the user experience greatly improved, but the barrier to adoption is also easily removed. This means that you can start your journey on ERC-20 but end up having your assets in another ecosystem like Binance Smart Chain.
Host: What’s the difference between Linear Finance and Synthetix. How do you guys differ?
Kevin: We differ from Synthetix in a number of ways. As mentioned earlier, our cross-chain compatibility gives users an immediate and COMPLETE solution to the scaling/gas issues that existing SNX users currently face. But do note, we are not a fork of SNX. SNX is built for Ethereum and not optimized for faster chains while we are. Hence, cross-chain compatibility and integration also give us an edge and long term viability for two reasons.
Expanding Interoperability: For instance, Binance is looking into moving into DeFi and are on a path to build the DeFi ecosystem on Binance Smart Chain, which holds enormous potential for Linear. Our users are able to asset swap any tokens on our protocol to BEP standard so users can continue to Lego build on an entirely new DeFi ecosystem, providing access and optionality, further expanding the network effect.
The cross-chain compatibility opens up a pathway to new markets and users. We will go after Binance’s own captive audience of over 400K accounts and 150+ fiat onramps to reach their customers that are inaccessible to SNX due to the complex nature of web3. We have a winning proposition as our protocol will be on a chain they are familiar with, have a clean, properly designed UX/UI for ease of use, along with the proper marketing/educational materials to handhold new users to our Linear Finance protocol. The food is at the bottom of the pyramid guys and in the mid-term, this is where the gold mine will be.
Host: Could you tell us a bit more about the 3 main products that you’ve built: Linear Buildr, Linear Exchange, and LinearDAO. What do they do respectively?
Kevin: Firstly Linear.Buildr a decentralized app so users simply go to linear.finance and they will be directed to another page where they can connect their wallet and subsequently deposit and stake their LINA tokens into our Buildr app.
Upon doing this, they can “Build” ℓUSD which they can subsequently use to purchase our synthetic asset or simply take off our protocol and use elsewhere in the DeFi ecosystem.
Building in this context means bonding an asset and turning into a ℓUSD equivalent. Essentially you would be collateralizing your LINA tokens.
Our Linear.Exchange will serve as the platform for users to use ℓUSD to purchase and sell our synthetic “Liquids” so they can get exposure to our investment assets. Note that as mentioned before, given our interoperability, our Liquids will be able to be moved off our platform. Our linear.exchange will serve this initial purpose but there will be additional features added shortly such as portfolio construction/asset management.
Regarding LinearDAO, those who hold a certain amount of LINA tokens can be members in our DAO which will vote on initiatives such as P-ratio, synthetic asset selection, collateral pool tokens and % mix, among other initiatives that will affect Linear Finance.
In the mid to long term, whilst token holders can still participate in governance, from a legal entity perspective, we will be transitioning from a Foundation to a full DAO structure.
Q1: Linear Finance has a grand vision. Could you please tell us what is its development blueprint? What are the highlights in future planning worth looking forward to?
Kevin: This pretty much explains the near term tech roadmap. Several key points here is,
- We plan to roll out multi-asset collateral functionality by end of year
- Governance will be up afterwards so that the community can decide the future of the protocol
- On top of the tech roadmap, our financial engineering team is working on listing different assets with a proper oracle set-up
How will you continue to promote your product in the future? Do you already have plans for other interfaces with other companies? (Twitter user @LazaroSatterfi)
Kevin: Yes, we are already in discussion with a number of Defi protocols to integrate not only LINA but also LUSD which is one of the most important keys to our success as it brings actual use case for our collateral backed stablecoin. Hence, over the next few weeks, you will see numerous partnership announcements as mainnet comes into play.
As for promotions, we will be doing heavy promotions and marketing within our own community groups and other well-known large-scale community groups, particularly those in the international markets and this is important as we can not only educate potential users but also get feedback to build localized synthetic assets.
Can you list 1 or 2 deadly features that make your project stand out from its competitors? What competitive advantage does your platform have that make you feel the most confident in yourself? (Twitter user @Ryham24917505)
Kevin: I want to say that we are going to hang our hat on three key features: Our scalability solution and being the most efficient synthetic asset protocols, having the most creative synthetic assets, and interoperability. 1. As we use other public blockchains as an L2 solutions, you will not only have faster price feeds but it’s also safe. A number of our competitors are showcasing fast speed and cheaper gas over L2 solutions such as OVM but note that as the TVL increases on OVM, it becomes more susceptible to hacks and is simply a risk that is not worth taking (thats my opinion) 2. We have spent considerable efforts in curating the synthetic assets to buy and our DTF, no more boring simple indexes and 3. Our interoperability allows users to cross-chain our assets so that they have the flexibility to explore and expand into other defi ecosystems.
A lot of projects have sprung up with the DEFI season and the quality of security is very poor. How does Linear Finance have security mechanisms? let the community know? (Twitter user @Macejko22011781)
Kevin: Yes, as Linear is based on a number of smart contracts, we are susceptible to smart contract hacks similar to all of the other DeFi protocols. Note that we are in the final stages of auditing with SlowMist and this will be finished upon mainnet launch.
What is your strategy to marketing and for Mass Adoption? What message do you want to send to community through AMA today? (Twitter user @Champli16156624)
Kevin: I touched a bit on our marketing plans going forward and its heavily going to be community related and us ensuring that our tokens can be utilized in other protocols. Starting at the beginning of next year, we will be transitioning to a DAO structure with LinearDAO and many of the decisions will be given to our community. So I ask the community to join us in our Discord and Telegram groups and tell us what type of assets you would like to see listed and any specific features that you would like to see on our exchange. In fact, I would love to see you guys come and try our testnet on Buildr and soon our exchange. Just come and see our testnet Buldr https://buildr-test.linear.finance/
And fill out the form below if you want to participate so that we can send you test LINA
How does the Linear Finance team assess the risks associated with market uncertainty and volatility? Is there a market risk hedging mechanism to ensure user safety? (Telegram user @andrewcoady)
Kevin: Yes, this is one of the issues we considered giving the stakers serve as the counterparty to the traders who hold the our synthetic liquids… So, for certain spot trades, we will be offering additional staking rewards for users to take the short position in order to balance out our debt pool.
What r plans in place for global expansion, are Linear focusing on only market at this time? Or focus on building and developing or getting customers and users, or partnershipsyou? (Telegram user @farrellrhianna)
Kevin: Currently we have already built a community for the Western (US/European) markets given this is where Defi adoption is massive and largely driven but we must not ignore other large target markets such as S. Korea where crypto adoption is very high and advanced as well as China were DeFi is still nascent. So we are pushing aggressively in those markets. We have also opened communities in Russia, Turkey, Vietnam and have eyes set on others!
Coffee, electronic sports, oil, stocks… Linear supports a very diverse range of traditional assets and commodities. Do you plan to include precious metals such as gold and silver in your assets? (Telegram user @Bal_pakna99)
Kevin: Gold and Silver will be one of the first commodities that we come out with. We are also exploring Oil and Coffee and ask that the community comes and lets us know of other assets they want to see. We will hold a number of proposals to determine this.
Essentially, most of the problems you’re solving would be solved when ETH 2.0 launches by end of the year. How do you fear Linear Finance would become redundant then? (Telegram user @starshades007)
Kevin: We actually welcome the introduction of ETH 2.0 as that will obviously increase the bandwith of the Ethereum network and allow more users to come and try our protocol. Solving the scaling and gas fee issues are short term fixes but we certainly rely on that to be a competitive advantage. It’s more on building creative synthetic assets for users to buy and our team has the financial background to do this.
Linear Finance has just announced a partnership with Moonbeam Network. What are your expectations of this partnership, what do you hope to achieve with them and what is the greatest benefit to users? (Telegram user @cryptolover1010)
Kevin: With Moonbeam, they are our foray into the Polkatdon network and we are continuing to build alongside with them and am looking to be on Kusama when they are ready along with the full integration in Q1 of next year when Polkadot launches. The efficiencies achieved with Polkadot are quite amazing
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