Oct 4, 2020 · 2 min read · cat
As we are approaching the launch of testnet in October, the Linear team would like to share more information about one of the core dApps of the Linear Suite, the Linear Buildr — a decentralized collateral pool for stakers to “build” ℓUSD with any form of assets (in the future) and to earn staking rewards. ℓUSD is also a core building block to later conversion into any Liquids with the launch of Linear Exchange.
What is Buildr?
Buildr is part of Linear’s decentralised application suite. Users can pledge and stake LINA tokens to build ℓUSD, the base currency of Linear Exchange. Besides LINA tokens, Linear Buildr will support other forms of collaterals soon. Think about inclusion of cryptocurrencies (e.g. bitcoin) and digital assets that represent real asset ownership (e.g. real estate assets)!
Stakers are entitled to staking rewards and a split of the transaction fees generated by Linear Exchange. They can then use ℓUSD minted to purchase synthetic assets on Linear Exchange to gain different investment exposures. ℓUSD can also be moved to other protocols or dApps within the DeFi ecosystem.
A quick glimpse into Linear Buildr! The team is working relentlessly to optimize our platform offering. A full instruction on the user journey will be provided upon launch of the Buildr.
How LINA Backs Liquids
All synthetic assets (Liquids) are backed by LINA tokens. Liquids are built when LINA holders stake their LINA as collateral by using Buildr to interact with the Linear staking contracts. Liquids are upheld by a 500% pledge ratio, which can be adjusted in the future through LinearDAO, the decentralized community governance application. LINA stakers will create debt when they build Liquids, and to exit the system (i.e. unlock their LINA) they must repay this liability by burning Liquids.
Building, Burning, and the P-Ratio
The mechanisms above ensure LINA stakers are incentivized to keep their Pledge Ratio (P-Ratio) at the target rate (500%). If the value of LINA or Liquids fluctuate, each staker’s P Ratio will fluctuate. If the P Ratio falls below target rate, they will be unable to claim their LINA until they restore their target rate. Users can adjust their ratio by either building Liquids if their ratio is above target rate, or burning Liquids if their ratio is below target rate.
That’s it for now. After stakers build ℓUSD, he / she will be able to continue the journey on Linear Exchange to start getting exposure of different Liquids. Stay tuned as we approach the launch of testnet. In the meantime, please follow us on Twitter, see our other articles on Medium, and join us for further discussion in our Telegram and Discord channel.
Linear Finance Information Links:
- Website — https://linear.finance
- Telegram Community — https://t.me/linearfinanceofficial
- Telegram Announcement — https://t.me/linearfinanceannoucements
- Twitter — https://twitter.com/LinearFinance
- Medium — https://firstname.lastname@example.org
- Whitepaper — https://linear.finance/defi/Linear_Whitepaper_EN.pdf