UserGA2025
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Multi-Collateral: A Guest Post
Dear Linear Community,
Let me quickly introduce myself. My name is Kelvin and I am the project lead of Athos Finance. I am grateful for the invitation from the Linear Finance team for me to write a guest post to share about the upcoming multi-collateral upgrade coming to Athos Finance and Linear Finance soon.
I will split the article into two main sections: the first section will showcase the changes that we are making as part of the multi-collateral upgrade, while the second section will give you a peek into the development process.
Let’s dive in!
Details about the Multi-Collateral Upgrade
With the introduction of multi-collateral, there will be a number of major changes to how Linear users interact with the suite of Linear products. In this section I will detail the changes you should expect as part of the overall experience.
Staking & Debt-Building
With the multi-collateral upgrade, users will have the option to stake other supported assets to build ℓUSD. Each asset will have its own target P-ratio. Asset with lower price volatility will have lower P-ratio and will allow you to build more $ℓUSD with every dollar worth of collateral.
Enabling various assets such as $wBTC, $wETH, $BNB and a stable coin — $BUSD in this particular case — as collateral should attract platform TVL, boost the amount of $ℓUSD in circulation and have a net positive effect on the price stability of $ℓUSD.
This should lower the barrier of entry and make it easier for users to build debt and trade synthetic assets. That will also mean more transaction fees generated from Linear Exchange.
Weekly Rewards Allocation
After the upgrade, weekly rewards will continue to be distributed for debt built by all collaterals, based on the amount of debt users build relative to the entire pool. In addition, percentage bonuses for weekly rewards will be applied to specific collaterals from time to time.
For example, a collateral might get a 100% bonus for weekly rewards. In that case, debt built with that specific collateral will then get 100% more rewards from the reward pool compared to debt built with other collaterals.
On the other hand, Linear Exchange transaction fees will be distributed exclusively based on the amount of debt built by $LINA as collateral. Any debt built by other collaterals will not be eligible for Linear Exchange transaction fees.
Last but not least, users are required to keep their P-ratios for a collateral above target to claim rewards designated for debt built by that specific collateral. For example, if a user stakes two tokens (Token A & Token B) as collaterals but only Token B is above target P-ratio, then the user is only allowed to claim rewards designated for debt built by Token B unless P-ratio for Token A is also restored above target.
We believe the ability to apply percentage bonuses for weekly rewards provides the protocol flexibility to incentivize users to build debt with specific collaterals. On the other hand, Linear Exchange transaction fees are distributed solely to users who build debt with $LINA to increase the attractiveness of holding and building debt with $LINA.
Liquidation
With the introduction of multi-collateral, each collateral type is considered as an isolated account for liquidation purposes. For example, if a user stakes both Token A and Token B as collateral and P-ratio for Token A has dropped significantly that it is now subject to liquidation, it will not affect Token B in any way.
Each collateral will come with its own liquidation penalty. You can expect lower liquidation penalties for collaterals with higher liquidity and lower price volatility.
Multi-Collateral Development Process
Now that we have an idea of what multi-collateral would look like in the future, don’t you want to find out about what steps we took to make this a reality? The team has worked tirelessly to deliver the multi-collateral upgrade, so I would like to share more details about each step of the whole development process to give you a better understanding of what we do.
Ideation
This is the first step in developing a successful product. This involves doing deep-dives into similar DeFi products, understanding the latest technologies, and brainstorming potential solutions. For example, we spent a lot of time thinking about how we can manage the debt-to-collateral ratio with different collaterals at different prices. We came up with the solution where each collateral will be treated as an isolated account with its own P-ratio so no cross-liquidation is possible.
Design
Once we have a general direction with where we are heading after the ideation phase. We now need a detailed design plan for the product. This includes upgrading the frontend of our dApps, creating user flows, and mapping out features of the product. We put a lot of attention to this step to make sure we create a product that is both functional and easy to use. Some of the key frontend considerations we had to make include things like how do users choose which collateral they should choose, or how do we let users know the weekly reward bonuses for each collateral?
Development
Once the design is complete, it is time to start building! This involves writing the smart contract code, implementing the frontend changes, and integrating the contracts to the frontend. We put a lot of effort in this to ensure our product is secure, reliable, and performs as expected.
Testing
Once the product is developed, we make sure it undergoes rigorous testing to ensure that it works as intended. All the edge cases are tested here to ensure the logic is covered by our contract. This is the stage where the team can identify and address any potential issues before the product is released to the market.
Audit
Once the product has been thoroughly tested, it is audited by a third-party security firm to identify any potential vulnerabilities. We have contracted PeckShield to conduct the smart contract security audit, and expect the audit to conclude before the end of this month. Once the audit is completed, we will go through any potential findings and address them wherever necessary.
Launch
Once the audit is completed, it is time to break the good news to the community and launch the product into the market!
So here it is! I hope you look forward to multi-collateral as much as we do! If you have any thoughts and questions, don’t hesitate to reach out to myself or a member of the Linear team.
Have a great weekend,
Kelvin
About Linear Finance
Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol that allows users to get synthetic exposure to various assets, including cryptocurrency, commodities, and market indices. Users can utilize our cross-chain swap functionality to instantly swap assets across leading blockchain environments and DeFi protocols with unlimited liquidity and zero slippage.
About Athos Finance
Athos Finance is the first decentralized delta-one asset protocol on Moonbeam. It provides users with on-chain price exposure through synthetic assets with full transparency and no slippage.
Let me quickly introduce myself. My name is Kelvin and I am the project lead of Athos Finance. I am grateful for the invitation from the Linear Finance team for me to write a guest post to share about the upcoming multi-collateral upgrade coming to Athos Finance and Linear Finance soon.
I will split the article into two main sections: the first section will showcase the changes that we are making as part of the multi-collateral upgrade, while the second section will give you a peek into the development process.
Let’s dive in!
Details about the Multi-Collateral Upgrade
With the introduction of multi-collateral, there will be a number of major changes to how Linear users interact with the suite of Linear products. In this section I will detail the changes you should expect as part of the overall experience.
Staking & Debt-Building
With the multi-collateral upgrade, users will have the option to stake other supported assets to build ℓUSD. Each asset will have its own target P-ratio. Asset with lower price volatility will have lower P-ratio and will allow you to build more $ℓUSD with every dollar worth of collateral.
Enabling various assets such as $wBTC, $wETH, $BNB and a stable coin — $BUSD in this particular case — as collateral should attract platform TVL, boost the amount of $ℓUSD in circulation and have a net positive effect on the price stability of $ℓUSD.
This should lower the barrier of entry and make it easier for users to build debt and trade synthetic assets. That will also mean more transaction fees generated from Linear Exchange.
Weekly Rewards Allocation
After the upgrade, weekly rewards will continue to be distributed for debt built by all collaterals, based on the amount of debt users build relative to the entire pool. In addition, percentage bonuses for weekly rewards will be applied to specific collaterals from time to time.
For example, a collateral might get a 100% bonus for weekly rewards. In that case, debt built with that specific collateral will then get 100% more rewards from the reward pool compared to debt built with other collaterals.
On the other hand, Linear Exchange transaction fees will be distributed exclusively based on the amount of debt built by $LINA as collateral. Any debt built by other collaterals will not be eligible for Linear Exchange transaction fees.
Last but not least, users are required to keep their P-ratios for a collateral above target to claim rewards designated for debt built by that specific collateral. For example, if a user stakes two tokens (Token A & Token B) as collaterals but only Token B is above target P-ratio, then the user is only allowed to claim rewards designated for debt built by Token B unless P-ratio for Token A is also restored above target.
We believe the ability to apply percentage bonuses for weekly rewards provides the protocol flexibility to incentivize users to build debt with specific collaterals. On the other hand, Linear Exchange transaction fees are distributed solely to users who build debt with $LINA to increase the attractiveness of holding and building debt with $LINA.
Liquidation
With the introduction of multi-collateral, each collateral type is considered as an isolated account for liquidation purposes. For example, if a user stakes both Token A and Token B as collateral and P-ratio for Token A has dropped significantly that it is now subject to liquidation, it will not affect Token B in any way.
Each collateral will come with its own liquidation penalty. You can expect lower liquidation penalties for collaterals with higher liquidity and lower price volatility.
Multi-Collateral Development Process
Now that we have an idea of what multi-collateral would look like in the future, don’t you want to find out about what steps we took to make this a reality? The team has worked tirelessly to deliver the multi-collateral upgrade, so I would like to share more details about each step of the whole development process to give you a better understanding of what we do.
Ideation
This is the first step in developing a successful product. This involves doing deep-dives into similar DeFi products, understanding the latest technologies, and brainstorming potential solutions. For example, we spent a lot of time thinking about how we can manage the debt-to-collateral ratio with different collaterals at different prices. We came up with the solution where each collateral will be treated as an isolated account with its own P-ratio so no cross-liquidation is possible.
Design
Once we have a general direction with where we are heading after the ideation phase. We now need a detailed design plan for the product. This includes upgrading the frontend of our dApps, creating user flows, and mapping out features of the product. We put a lot of attention to this step to make sure we create a product that is both functional and easy to use. Some of the key frontend considerations we had to make include things like how do users choose which collateral they should choose, or how do we let users know the weekly reward bonuses for each collateral?
Development
Once the design is complete, it is time to start building! This involves writing the smart contract code, implementing the frontend changes, and integrating the contracts to the frontend. We put a lot of effort in this to ensure our product is secure, reliable, and performs as expected.
Testing
Once the product is developed, we make sure it undergoes rigorous testing to ensure that it works as intended. All the edge cases are tested here to ensure the logic is covered by our contract. This is the stage where the team can identify and address any potential issues before the product is released to the market.
Audit
Once the product has been thoroughly tested, it is audited by a third-party security firm to identify any potential vulnerabilities. We have contracted PeckShield to conduct the smart contract security audit, and expect the audit to conclude before the end of this month. Once the audit is completed, we will go through any potential findings and address them wherever necessary.
Launch
Once the audit is completed, it is time to break the good news to the community and launch the product into the market!
So here it is! I hope you look forward to multi-collateral as much as we do! If you have any thoughts and questions, don’t hesitate to reach out to myself or a member of the Linear team.
Have a great weekend,
Kelvin
About Linear Finance
Linear Finance is a cross-chain compatible, decentralized delta-one asset protocol that allows users to get synthetic exposure to various assets, including cryptocurrency, commodities, and market indices. Users can utilize our cross-chain swap functionality to instantly swap assets across leading blockchain environments and DeFi protocols with unlimited liquidity and zero slippage.
About Athos Finance
Athos Finance is the first decentralized delta-one asset protocol on Moonbeam. It provides users with on-chain price exposure through synthetic assets with full transparency and no slippage.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.