LINA down 23% as DeFi protocol Linear Finance shuts down

Linear Finance is shutting down after nearly five years of trading due to profitability obstacles and a sudden drop in the market capitalization of its native token last week.

The DeFi protocol has "struggled to generate sustainable returns" since its initial launch, a Thursday announcement read.

"The project has been funded through a combination of personal contributions from the project owner and token liquidations," read a notice on Linear’s official Telegram channel. "Unfortunately, this model is no longer viable."

Linear Finance offered exposure to real-world assets (RWAs) like commodities and forex markets through a crypto asset class called “Synthetics” or “Liquids.” These tokens allowed users to invest in RWAs via a decentralized platform without directly holding the underlying assets. Users could also buy LINA, the project’s native token, used as collateral to mint Linear’s native stablecoin LUSD and participate in governance decisions.

On March 21, Binance announced LINA’s delisting, along with four other digital assets. The delisting was scheduled to take full effect on March 28. According to the protocol’s response on Telegram when it was announced, Linear Finance had no prior warning of the decision.

"The recent decision by Binance to delist the LINA token accelerated these challenges, resulting in a 65% reduction in market capitalization and a significant loss of the remaining operational runway," Linear Finance said on March 27. 

LINA’s market cap fell from about $14 million around March 21 to under $6 million at press time. The token was down over 23% as of writing, per The Block’s price page.

The Block reached out to Binance for comment.