May 28, 2021 · 13 min read · cat
Kevin and Drey go into great detail during an AMA hosted by the Linear Exchange Community.
Kevin: Hey guys…..
Ant (host): Hey guys! Kevin and Drey are here with us today to answer some of your questions. Thank you Kevin and Drey for taking the time to be here with us!
Kevin: Hello, thanks for the taking the time today. We are happy to be here to speak with our own community, give some updates and also answer some pressing questions.
Drey: Yep. Especially when market is not UP ONLY anymore — good time for us to share our development progress etc.
Ant: Kevin & Drey, care to give us a general ecosystem update and overview?
Kevin: Yeah so let me start off…
So going off of Drey’s first statement, we have seen substantial volatility in the crypto markets. This has adversely affected altcoins and the amount of TVL locked within the DeFi ecosystem. TVL on ETH has dropped substantially over the last week or so going from 90bn in value down to 60bn. Nevertheless, we remain bullish on crytpo in general given the institutional acceptance of digital assets this year….
We see other DeFi projects in the space and they continue to build and innovate. Linear is no different in this regards.
The team continues to develop as you can see over the last few weeks as we have added core functionalities such as liquidation protocol and vaults which serve as a stepping stone to more Linear products and functionality.
Drey can discuss more on the roadmap ahead.
Drey: To add more on this, we have and will submit quite a few proposals to work with other DeFi projects in expanding the composability and variety on Liquids to be listed. PieDAO was the latest that we revealed there are more to come!
Ant: And seems that PieDAO was a big success looking at the votes.
Drey: Indeed, from tech and product perspective, I would say right now we are at an important stage of features BUIDL-ing.
Kevin: Yes, soon we will have a DEFI ++ synthetic index and likely an NFT one following after.
Ant: Exciting things ahead!
Drey: We just launched Linear Vault as an extension of our product offering suite by providing an alternative option for lUSD holders (likely LINA stakers) to earn extra yield by subscribing into either a weekly farm OR the lUSD/BUSD LP pool on Pancake.
Immediately we are seeing a huge improvement on the stability of the lUSD price.
We believe these can be further expanded into different chain ecosystems later on (Ethereum L2/Polkadot) so users have their own option to park at corresponding pools shall they find suitable.
What’s next are some really exciting features — short positions and multi-asset collaterals.
I am sure we all agree that finally the crypto market has stopped being just a UP ONLY market but we are seeing more healthy retracement and volatility. This is the time where being able to open short is important to users on Linear.
We are now working on providing a seamless flow for users to open short without much hassle — even with leverage in the long run. This is only possible with high performance EVM compatible chain as sidechains/L2. We expect the debt pool to be more stabilized with short positions so that people can take views on both sides
Multi-asset collaterals will be another big gun in our arsenal that would bootstrap our TVL to another level — our team is very excited about that!
And of course, in parallel to these functional upgrade, we care a lot on the governance of the protocol — we will soon reveal more details on how we make Linear completely decentralized and be able to iterate quickly together with the advancement of Project Eagle.
Stay tuned and we can’t wait to share more in the coming few weeks.
Ant: All sounds great! Looking forward to these features. And that ‘avian related news’ of course.
Kevin: Thanks Drey, as the building blocks continue to be built, we will be able to finally realize the potential of some of the partnerships we have built with our protocols on BSC. We will have other synthetic stablecoin pools coming out over the next few weeks for users to tap into.
Also, users have been asking about marketing efforts. Spending on marketing at Linear is always based on an opportunistic and ROI approach so we will spend the necessary dollars to get the right news out at the right time.
Overall, we have a packed development schedule and we are excited to progress along this journey and thank everyone for their support… We will continue to find ways to users who join our community and stick with us along the way. Let’s take some questions now?
Ant: Sounds like a plan! Let’s start with a (double) question.
Hi Kevin & Drey,
Moonbeam currently has about 42 partners and projects building on it, including of course Linear.
I have two questions.
1. How is Moonbeam able to deploy via one parachain slot on DOT, the so many differing use cases seen with those who partner with Moonbeam? It appears one slot can host multiples of different dApps, including Linear.
2. Funding for the Moonbeam parachain slot.
Moonbeam is ultimately responsible for securing a parachain slot on DOT, which slot will give Moonbeam partners access to the DOT relay chain.
A parachain slot is expected to cost 1MM DOT.
I appreciate that Moonbeam will soon be launching their native token Glimmer (GLMR), and that a sizable amount of GLMR will be set aside for securing the Moonbeam parachain slot.
However, Moonbeam partners are also expected to contribute towards the cost of the Moonbeam parachain slot.
What arrangements has Linear made with Moonbeam for its contribution towards the parachain slot cost (1MM DOT)?
I appreciate Linear could raise its share of the DOT needed by offering a Parachain Lease Offering, whereby Stakers of DOT towards the parachain slot, can be rewarded in LINA during the life of the parachain slot lease .. equally or in combination, Stakers of DOT towards the parachain slot could be rewarded in both LINA and GLMR tokens .. obviously various DOT raising options are available
.. can Linear indicate at this time, what form of DOT raising initiatives it is looking at, and what amount of DOT tokens Linear will be responsible for raising, to assist Moonbeam reach its 1MM DOT target?
Drey: To the first question, Moonbeam will deploy just like other parachain — through the auction starting from Kusama then Polkadot side.
We can expect there will be a launch on Kusama first as it’s the testbed of Polkadot as always. Their Kusama version aka Moonriver will be the first deployment venue for Linear on Polkadot.
As showcased in the previous Moonbeam Conference, our development has been going well and we really look forward to opening up new environments in the Polkadot Ecosystem. (For those who missed the Moonbeam Conference demo, you can check it out on Consensys where the Moonbeam team particularly highlight the integration of Linear on them)
And as you can see from the moonbeam site, there are tones of reputable DeFi projects that are going to deploy on it and being the ANCHOR project on Moonbeam, we expect great ecosystem to be built from there, and to other parachains eventually.
Kevin: In terms of the second question. We were one of the first partners that Moonbeam brought into the ecosystem and we treasure and value that relationship and will do our part to contribute from a development perspective as Drey has mentioned and monetarily. For the Parachain slots, Moonbeam is holding crowdfuning events and we will be contributing in their efforts to secure the parachain.
Ant: Thank you Kevin/Drey for this clear answer.
Can an ordinary investor create a synthetic asset class to be traded on the exchange by everyone?
Drey: That’s a good question. As mentioned above, we are working towards a complete DAO structure and before that, we had several occasions in setting up votes to the community to list different assets they wish to see on Linear Exchange.
I would say this has been a semi-DAO format which is a good dry run / rehearsal for us to have the experience of listing new assets as per community’s feedback.
After we make ourselves completely in DAO structure we can expect to see community members directly create proposals on not only different asset classes but also other features or parameters change.
Ant: Neat! Already got a bunch of proposals on my mind.
Kevin: Yeah, for now the team procures the assets and works with the oracle providers to supply the price feeds.. For single crypto assets its quite easy but for indices such as PieDao, a lot of care goes into finding the right indices and right index providers. So going forward under the DAO structure you will see proposals from both community AND the linear team.
A few weeks back, we ran a community competition vote on listing a new synthetic asset and the winner was ERN. We will eventually list ERN once reliable data feeds are available. Otherwise listing ERN would have opened the protocol up to potential exploits. Thus, we apologize and will keep ERN in our listing pipeline.
Ant: Thanks for clearing the air on ERN!
A follow-up question about the DAO:
What kind of decisions can the DAO make? Will Linear be completely decentralized and governed by its users? Is it currently semi-centralized? When will it give full control to its users?
Kevin: As mentioned before, decisions given to the DAO will include items such as changes in P-ratio, which asset allowed to be staked, which assets to list (most important), what to do with Linear’s reserve token tranche (burn it or invest it as advised by Kevin :D) amongst the many other decisions that synthetic asset protocols will face…..
Just like all other protocols going through the process of transitioning to a DAO, we come to face issues on how much “control” to give to the community and how much to retain. Running the protocol is a full time job for us at Linear but imagine passing small but vital tasks to the community to handle and this may become an issue… So, we are working through the structure and trying to find the right balance so community can have their say and Linear keeps plugging along.
Ant: The eternal battle of “burn” . I’d agree with investing, many nice things can be done with that.
Next question about something that has been teased already.
Can you tell us more about multi-collateral staking & assets that can be staked?
Drey: Multi-collateral staking refers to the ability of allowing users to stake collaterals other than the native platform token LINA but also other major cryptos.
It greatly reduces the barrier to entry and increases the TVL i.e. the aggregate debt pool size, which is extremely crucial to stakers as they then proportionally bear less debt shall the pool inflates.
We are currently exploring the possible ways in realizing such function. There are quite a few components and options to consider. For example, the practicality of doing a cross/isolated collateral pool, how does it affect the UI the least while advanced users can enjoy a CEX-like of experience etc. We will disclose more in the coming quarter :)
Depending on which chain you are using Linear on, the accepted multi-asset collateral would vary slightly.
For example, for BSC Linear Buildr, BNB will definitely be included while in chains like Kusama/Polkadot, KSM/DOT AND the corresponding parachain tokens will be accepted, together with some major ones like BTC (wrapped) for sure.
And OF COURSE — it is up to the DAO’s suggestion in the long run.
Ant: Next question
It’s been roughly 6 months since the launch of Linear Exchange on BSC. I think it’s fair to say based on the metrics I’ve seen, Linear has captured quite a few users. Being a cross-chain protocol I can’t help but think Polygon, Solana, Cardano, Fantom etc are all within reach over time meaning Linear can potentially outpace the likes of SNX and Mirror long term and capture a much broader user base. What are your plans to expand after integrating with Polkadot?
Kevin: Linear was always built as a cross-chain compatible protocol so its obvious that we will continue to always have a multi-chain strategy. How do we choose which chain to look at? We will go where the party is at and where synthetic assets are needed. As mentioned, Polkadot will be implemented (once its released) and we are already formulating the plan for the next implementation to be finalized near the end of this year.. By that time, the ecosystems will be built on the other chains above and we can further assess.. Drey can talk a bit more about L2 solutions/ecosystems as that's near and dear to his heart.
Drey: Speaking of native Ethereum L2 solution, it’s not hard to find out there has been great discussion on different alternatives e.g. Polygon, Arbitrum, OVM, zkVM and solutions from STARKware. While I would say we are looking closely into different solutions available, we will not deploy until the core functions are done (the aforementioned functions).
And just like Uniswap, we don’t want to just forcefully bind Linear into a particular L2 which requires dedicated resources and effort to make it cross chain compatible with other deployed implementation, we want the community also be able to decide on that of course with us being the core contributor to implement the solution and more importantly explain on different solution’s pros and cons for DAO to decide.
Ant: A general question now.
What important milestones does Linear aim to achieve by the end of this year and in the future? How will it help you and how will Linear be successful in 2021 and beyond?
Kevin: I believe we mentioned above a number of the initiatives that we are working on and we are confident that once we execute on these, we will set ourselves up to quickly and fully expand our Linear ecosystem amongst different chains.
Ant: Next question.
What can we expect from June? Very curious about the short term roadmap. What is Project Eagle?
Kevin: Short/invers token is almost done as the smart contract work is done and our front end team is working on the interface so that will roll out shortly.. A number of new assets will also be listed on the exchange. New LUSD pools at other defi protocols and yes, we will make an announcement on Project Eagle in a few weeks time…. cannot disclose more on that other than we have dedicated resources working on this.
Ant: Next question.
What are the highlights of Linear’s technology and products that you believe will help you succeed? How much revenue does Linear generate to sustain the project, and what plans do you have to attract more users in the future?
Drey: Unlike other competitors who are either purely business / tech driven, our team is a more balanced one that can actually provide a more comprehensive product suite to the users.
For example, some platform uses a segregated debt pool model on stocks which is actually problematic and the whole ecosystem is purely driven by yield farming instead of meaningful trading hence the stock tokens are always at premium.
Or some platform that got stuck by committing way too early on particular L2 solution which keeps postponing on their roadmap, equivalently just making the protocol stopped and un-usable.
In a lot of perspective, we are delivering a lot of functions that look similar to users but actually we paid huge amount of effort in a) UX (most impt) and b) contract level improvement with a balanced consideration of trad-offs in performance/decentralization.
Some platform claimed to be smoking fast but their order book or even oracle is centralized. Shouldn’t user rather want to use a CEX with that regard?
Ant: 100% agree. Final question.
With the BSC project hacks and exploits, how do you try to prevent such things?
Drey: This has been our core focus and built in to the mind of devs. Never fork code and test in production!
There are a lot of protocols which just simply fork code and change the theme and style and some parameters like the colour coin age. (-> Colour DeFi coin?)
For us, apart from coding the best features we want to deliver to users, we actually spent a lot of time in testing/test cases as this is the essence of smart contract security.
Edge cases, boundary testing are all very important as THERE ARE THE STUFFS THAT CODE AUDITORS NEVER WILL BE ABLE TO FIGURE OUT, OR AT LEAST NOT BEFORE THE EXPLOIT IS DONE.
But still, we engage to code auditors every single time to make sure there is a second pair of eyes to help watch out for some potential issues or discuss on how other DeFi protocol are maintaining in terms of best practices.
Have to say sorry for our beloved community as in bull market, a lot of projects are willing to pay more multiples of money to code auditors to make all of them super busy — delaying our schedule in launching new functions.
Ant: Thanks a lot Kevin & Drey for taking your time to answer so in depth.
Unfortunately time has flown by so we will wrap up here, the next AMA we will schedule more than an hour and allow the community to also ask questions during the AMA.
Kevin: Thanks guys!!!!!!
Drey: Thanks guys. My pleasure as always.
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.