On July 29, Linea, a Layer 2 solution on Ethereum developed by Consensys, officially announced the details of its token, LINEA.
Several key aspects, such as the timeline for the Token Generation Event (TGE), remain uncertain. Details of the airdrop strategy and supply management have also not yet been clarified.
9% of the total supply of the LINEA token is allocated for the airdrop
According to the official blog and social media channels, the total supply of the LINEA token is 72,009,990,000 tokens, which is approximately 72 billion. This exceeds the initial circulating supply of Ethereum by a thousand times. It is a significantly high number for a Layer 2 token, revealing its economic characteristics for the first time.
It is worth noting that 9% of the total supply of LINEA in tokenomics will be distributed through an airdrop process for early adopters. However, details regarding eligibility criteria, distribution timeline, and specific requirements have not been officially disclosed.
Before the TGE event, Linea unveiled several important plans to prepare for the token launch, including: token distribution through various methods (with early adopter airdrops being one of them); introducing an ETH-based yield mechanism for the network; and creating an ecosystem development fund.
While many operational details of these new mechanisms remain unclear, the simultaneous release of public economy tokens and internal economic guidance represents a rare level of transparency, especially compared to many current Layer 2 projects that have yet to disclose clear information about their tokens.
We will share more details about the design of the original production bridge, the Linea Union charter, and how Linea will play a pivotal role in the future of Ethereum," shared Declan Fox, one of the developers at Linea.
Opportunities and Challenges
Since Linea is developed by Consensys, one of the leading esteemed institutions in the Ethereum ecosystem, the launch of the token could attract significant interest from the Web3 community, especially among early users who previously interacted with the Linea test network or its bridge. However, no official confirmation has been issued regarding the specific beneficiaries of the airdrop distribution.
However, a total supply of 72 billion LINE is considered enormous and has sparked widespread debate in the cryptocurrency community. This massive amount of initial supply of ETH, which exceeds the original supply by a thousand times, raises concerns about inflation structure, long-term distribution, and the potential for value depreciation.
In the absence of strong token lock mechanisms or clearly defined distribution strategies, sell pressure after the TGE event may be a potential scenario.
Linea previously paused its blockchain. The recent pause of Linea's blockchain has sparked discussions about its commitment to decentralization as a solution for Layer 2 Ethereum (L2).