Feb 8, 2021 · 10 min read · cat
Linear Finance is a cross-chain compatible, decentralized synthetic asset protocol to cost-effectively and quickly create, trade, and manage synthetic assets (Liquids) with no slippage and unlimited liquidity.
DeFi Naut | DeFi Raccoons: I hope you’ve made yourself comfortable and will enjoy today’s session, so let’s get started. Welcome, please tell Raccoons a bit about yourself! 😄
Kevin | Linear Finance: Hello everyone, its a pleasure to be speaking here to your community.. Just a bit of background on myself. I started my financial career in Silicon Valley, doing M&A for large ERP companies such as Microsoft and Oracle. I then went to business school and afterwards been out here in Asia for +14 years building structured products and working on debt. On the crypto side, i started off as a miner (gpu/asics/fpgas) and then moved to investing in projects, specifically DeFi projects
CapitanoTA: Welcome @KT_LinearFinance Pleasure to have you here!
Kevin: My co-founder Drey (CTO) has previously built the largest STO platform in Asia and previously worked on the trading floor at HSBC and Deutsche Bank. So rest assured that Linear is a platform that is financially sophisticated and is a synthetic trading platform that is built by traders for traders.
DeFi Naut: I can see that you guys have a solid background for what you are set out to build! What’s an STO platform btw? The term might be unknown to a few. Security Token Offering?
Kevin: Yeah, it was a platform to tokenize real world assets, particularly real estate
DeFi Naut: OK good stuff! So let’s move onto Linear Finance. We like to start off with an elevator-pitch for the people that haven’t yet heard of Linear Finance — tell us what it is and what are you trying to build?
Kevin: Ok.. Linear Finance is the first cross-chain compatible synthetic asset protocol that allows users to quickly and cost-effectively build synthetic assets with infinite liquidity and no slippage. We do this by using public blockchains like Binance Smart Chain and Polkadot (Coming soon) as an imminent L2 solution which means transactions are fast, cheap, and with finality. Also, because of our cross-chain compatible nature all of our assets can be swapped into different blockchain formats such as ETH (ERC-20) and BSC (BEP-20)
DeFi Naut: Binance Smart Chain and Polkadot are heavy hitters. What has your experience been so far working with BSC? Is it as well documented as Ethereum?
Kevin: Given that BSC is EVM compatible, it was easy to port over our smart contracts to BSC.. The documentation is there and available but I can also say that there were certainly challenges we faced in the development process.. As all developers would know, even though smart contracts are written a certain way, how they behave on different chains is still unknown.. Hence, we needed to do quite an amount of testing and debugging to get this right… My team certainly stepped up to the challenge in this regard
DeFi Naut: OK happy to hear about your experience. There’s so much hype out there, we’d like to get down and dirty and hear from the devs themselves, so these AMAs present excellent opportunities for that. So in raccoon terms (layman terms), building synthetic assets with infinite liquidity and slippage — what does this exactly mean like in practical terms and why would I want to do this? Could you maybe give an example?
Kevin: Yes, so with Linear Finance, all the stakers in our debt pool essentially act as a counterparty to the traders on our exchange and in return they are rewarded with LINA staking rewards and a portion of the exchange fees. So in actuality they provide the most important part of our protocol, which is liquidity. So when you come onto our protocol and buy Liquid Gold or Silver, your counterparty are all the stakers in the debt pool. Without the liquidity, many bad things can happen in a synthetic asset protocol, synthetic assets can go off peg, making the market inefficient.. And as we all know what happens when we have systemic inefficiencies… somebody bears the price. One of our main goals at Linear is to avoid this… Why pay for a poorly designed system right? This is Defi, we are supposed to move forward, not backwards
DeFi Naut: OK that makes sense! Thank you for clearing that out. So now about the idea behind Linear Finance, was there something specific that sparked this idea? Something you saw maybe at another project or a need in the market?
Kevin: Inspiration comes from two sources..1. Being from traditional finance we see the value of synthetic assets as we can give EVERYONE in DeFi access to essentially any asset as long as we can get a reliable data feed. Yes, sure we can give access to stonks but also many other thematic asset classes (you guys will have to wait for announcements on these but you will be surprised)….2. Everyone in this group knows the gas/scaling issues of the ETH chain so we tackle this by putting Linear on BSC….. proof is in the pudding.. Gas costs at other synthetic asset protocols on ETH costs +50–75 USDt per transaction… at Linear its 0.30c to 1.50 USDt for the same transaction same exposure… oh yeah and its fast and you can still swap the asset to ETH….. You guys like burning money? I don’t… Let’s make DeFi accessible for everyone… small stakers, big stakers… don't need to be a whale
DeFi Naut: I like your style, let me put it this way 🙂 You seem like a hands on type of guy ready to kick every DeFi barrier in the n*tts 😄
Kevin: We built Linear for the community!! that means its needs to transparent, honest, innovative, and efficient. This is tech…. let’s go forward, not back to the stone ages and start charging people ridiculous fees.
CapitanoTA: Can you tell us about the Linear Finance Buildr? Because I know that this is the way to stake 😊 that would be interesting for guys that would hodl and stake LINA
Kevin: Sure thing.. So our Linear Buildr Mainnet V1.0 is our custom build dApp, developed on Binance Smart Chain and its the heart of our ecosystem. Through Buildr, users are able to stake their LINA tokens and build our Liquid stablecoin (LUSD) which can then be used in our Linear.Exchange or even taken off our protocol and used to purchase assets on other DeFi protocols. Our swap function is also built into Buildr and serves as the gateway between the ETH and BSC DeFi ecosystem… Just recently, a number of users have built LUSD and then taken it to pancakeswap to swap assets. This is excellent as it helps integrate Linear more and more into the DeFi ecosystem
DeFi Naut: That’s really impressive, so LUSD is the base currency of the linear exchange
Kevin: That’s right, LUSD is the base currency and LINA is the token that is used to stake. LINA also serves a dual purpose also, serving as a governance token so when our Dao comes out, users will be able to make a number of important protocol decisions…..
DeFi Naut: What’s the APY like?
Kevin: I believe when i last looked, the APY was ~80%
DeFi Naut: So I was wondering about the partners and initial key investors. Are there any that you would like to expand upon?
Kevin: Absolutely, partners and initial key investors were instrumental in helping us get to this point. Investors such as GB Ventures, CMS, Hashed, NGC, CMS, Alameda Research were super helpful in helping open doors and connecting to other defi/tech partners.. Particularly special thanks to Hashed who helped open the Korean market for us as that is a complex market to tackle from a user acquisition perspective. With Hashed they also assisted in our listing at the Korean exchanges…. From a tech perspective, much thanks to the Band team for getting us our price feeds up and running (its really fast) and for the Moonbeam team for working together with us on the Polkadot integration
DeFi Naut: Hashed is like the biggest one from Korea right? Heard quite a bit about them.
Kevin: Huge…. Strong knowledgeable investors
DeFi Naut: So right now Linear Exchange is deployed on Mainnet. This is probably like one of the biggest milestones so far right? How’s everything going so far and what has been the community’s response?
Kevin: Linear.Exchange has been deployed on Mainnet last week and the response has been very strong. Just over the last 24 hours, we have generated over 2.4M LUSD in trading volume. Over the last week we even had certain days were trading volumes were very high as users were trading silver…. From a user perspective, many users like the UI/UX as its clean and easy to use and obviously the fast transaction speeds and much reduced gas costs.
DeFi Naut: 2.4M usd volume? Are you serious? damn… that’s impressive
Kevin: Yeah, we look to increase this as more assets are listed.
DeFi Naut: ok so before we move on to the community questions, we’d like to know what Kevin has in store for us in the near future 😉
Kevin: The roadmap is full of product improvements. On the tech side, users will soon see additional trading functionality, multi-collateral staking, and of course our integration with DOT. On the asset side, we will have passive/active managed indices, creative thematic exposures, leveraged derivatives, and inverse tokens.
DeFi Naut: Ok, we will let the floodgates open and then Kevin maybe can select 5 questions, and then select the winner?
Kevin: Sounds great!
Derek Campbell: Synthetix has been operating in this field for a long time, has a certain first-mover advantage, and has put the Layer 2 expansion solution on the agenda, and ETH 2.0 is also in full swing. Why can Linear Finance stand out in the DeFi synthetic asset track?
Kevin: Elephant in the room question. As this is constantly asked, I will first answer with a graphic from our community that explains things well…
I won’t say much more but just let users know that the devil is always in the details. L2 isn't ready yet for full defi adoption as there are finality issues…. meaning your tokens are stuck for 7 days when transferring from L2 to L1. At Linear we are focused on transaction speed, costs saving and maintaining composability. We would never keep your tokens from you.
The Raccoon: What plans does Linear Finance have in partnering with major lending protocols such as Maker Dao or dYdX Debt Collateralized Debt Positions (CDP) to try to expand the liquidation protection feature of a users position?
Kevin: For the DAO we are working on this as well as a full restructuring of our legal entities into a decentralized manner.. But from a user perspective as long as you hold 1 LINA, you can participate in voting on issues like fee splits, asset listings, Lina Improvement protocols… So be on the lookout for this
Andrei: What innovations has Linear Finance brought to the DEFI space? How is Linear Finance changing the new DeFi ecosystem and what are the plans for the next few years?
Kevin: Look, when we innovate we are going to do it right and this reverberates throughout everything we do, to the tech we release and to the assets we list…. Listing stocks for users? looks great and this is so easy to do, all I need to do is have a data feed and be decentralized.. We can do this in our sleep but how about building assets for crypto users that they want and is structured correctly.. Why bring old financial assets to crypto when its built by the same people who don’t have the right incentives to their investors? At Linear, everything we bring out is transparent, structured well and is backed by institutional level research and information so users can make the right decision when trading… I won’t throw out a DEFI index and just call it day….
Avangator: Lots of newbies who sense crypto is gonna be huge are entering the space, but many know little about about specific coins/tokens. Can we expect some carefully constructed, Linear -unique indices in the Exchange? Think DeFi, CEX, DEX, NFT, Top X MC types of baskets.
Kevin: These will be the first we tackle but will expand greatly on this.. There will certainly be indices you won’t see from other exchanges.. both CEX and DEX
Raja King: While you build your project, do you take into account community feedbacks and demands?
Kevin: Users and the community are the most important thing to us at Linear. Whether its the products we provide you to trade but also in how we treat our users and community.. Fairness and transparency.. I don’t care if you own 1 LINA or 1M LINA, you will be be treated fairly and any issues you have we will go ahead and address… Don’t believe me? Join our TG and or Discord groups and watch our admin team. There hasn't been one issue we haven't worked on resolving… better yet, go and as our other users, they are are testament to our effort in this regards.
DeFi Naut: Great! 😄 Thank you for the elaborate responses and taking the time Kevin
Kevin: Thanks for everything!! and great group of questions!
Stay in touch!