Synthetix, represented by Synthetix, is a very imaginative project in the current wave of DeFi. Synthetic assets can become a bridge between the real world and the encrypted world, but they are just in the ascendant and in their infancy. The synthetic asset project Linear Finance attempts to combine with other public chains such as Binance Smart Chain to create a more compatible product. If you want to understand its basic situation and determine whether to continue to pay attention or even invest in it, welcome to read the following interview.
Wu said blockchain author Colin Wu talks with Drey, co-founder of Linear Finance
1: Can you introduce the development timeline of Linear Finance? Start, current stage and future plans?
I started to pay attention to and pay attention to the development of blockchain and cryptocurrency 4 years ago, and I did related work full-time at the end of 2017, mainly for the digital transformation of enterprises with tokenization technology. At the end of 19, I was already paying attention to DeFi. , Seeing the huge development potential in it, began to “get deeper and deeper.” At that time, my other founder Kevin and I had been talking about the entire DeFi industry, trying out different kinds of DeFi applications, and learned that although there are already many lending agreements on the market, there are mixed results in derivatives/synthetic assets.
This reason is not difficult to understand, because the derivative sector actually requires more knowledge in both finance and technology. Kevin and I think DeFi can be said to be the biggest innovation after Bitcoin and smart contract platforms. Since I really challenged the status of the traditional financial industry, I wanted to start with the synthetic asset and build the Linear Lego cube to combine different components in the entire DeFi industry, which is commonly known as “composability.”
In July, we finally finalized the team and started the development of the Linear project. We started from a cross-chain perspective to solve various problems caused by the existing Ethereum performance, such as high handling fees and oracle update frequency. The slow-induced problems of preemptive transactions and poor types of synthetic assets. The reason why we adopted cross-chain instead of Layer 2 on Ethereum is because the existing Layer 2 technology has its own problems, and using cross-chain can solve the above problems to the greatest extent, and can also access different blockchains. Of ecology.
For example, we will first connect the EVM compatible BSC, and use BSC as the Layer 2 of Ethereum. Now that Linear’s tokens and pre-staking platforms have been launched, users can obtain LINA from different decentralized channels and stake them for rewards. The beta version is tentatively scheduled to be launched in October, let the community try it out, plus code audit and debugging bounty program, the official version will be launched in November! Features mainly include Buildr (Pledge to generate LUSD-Synthetic Linear Platform dollars) and Exchange (for different synthetic quality product risk exposures). Linear will add multi-asset pledge, advanced trading, and governance functions in the future.
2: We know that Linear Finance is mainly engaged in synthetic assets. Could you please briefly introduce the current status, application scenarios and value of this direction?
Imagine a stock investor who wants to set up a stock account abroad. The entire KYC process has already taken at least 2 weeks, plus the transfer of legal currency and liquidation will be an extra 3-5 days. Assuming that the user wants to dabble in the risk exposure of cryptocurrency, it will take another few days.
The Linear platform is designed to solve the settlement time and transaction slippage. Users can use Linear to switch the risk exposure of different asset classes at will. The price is based on the oracle and the entire staking pool is traded. It has become Peer-2-Pool’s new “P2P” “. In the long run, Linear can list different types of assets, and different interesting assets can be proposed by the community, such as NFT index and DeFi index, as long as there is a source of price/index, it can become an asset. It can be seen that our TAM (total potential market) has no boundaries, because Linear can “synthesize” any asset, allowing everyone to convert at will.
3: The main advantage of Linear Finance is the decentralized Delta-One (price change is consistent with the underlying asset) asset agreement with cross-chain compatibility. What is the difference from the predecessors of synthetic assets such as Synthetix, UMA, etc.?
We are different from existing DEX (such as Synthetix) in many ways. First of all, our advantage lies in cross-chain compatibility, which provides a complete solution for DEX users to solve the problems of expansion and high transaction costs. More importantly, cross-chain compatibility has opened the way for us to enter new markets and acquire new users. For example, our platform will first be integrated into Binance Smart Chain (BSC). At the same time, we are now considering other potential “Ethernet” Killer”.
Binance comes with more than 400,000 accounts and more than 150 legal currency barriers, which solves many other existing platforms due to the complexity of Ethereum Web3. Binance is eager to upgrade CeFi to DeFi, so we chose to build the platform on BSC-this is a familiar agreement.
In terms of products, Linear’s UX/UI is easy to use, and it is also easy to promote and educate new users, and even make transactions without slippage. Finally, it is worth mentioning that LINA, the token that pledges Linear, can gain access to digital assets, commodities, foreign exchange, market indexes, and even add some creative thematic indexes, such as e-sports, to create 360-degree investment risk exposure.
In the long run, Linear believes that the world of blockchain will be Inter-Chain. Different users will use the corresponding blockchain to do cross-chain transmission according to different situations. Linear’s vision is to grow together with these blockchains. User aggregation and intercommunication of Defi on different chains.
4: How is the current safety audit progress of the product? What to choose for the oracle? If LINA as collateral fluctuates significantly, how to deal with it? The product has undergone two security audits to ensure that the tokens and pledge contracts are safe and reliable. Every future update will ensure that the code is audited.
The current oracle does not specify which one, because we are not Maximalist, but rather focus on the composability of the DeFi world. The main partners such as Chainlink, BAND and Tellor, we are also docking, based on that we are a cross-chain project. Therefore, the considerations will be different in different chains, and are also affected by the degree of access between the oracle partners and each chain.
Under normal circumstances, staking users need to check the platform regularly, because they need to ask for rewards regularly, so we can ensure that users pay regular attention to the staking ratio. In the long run, if LINA fluctuates due to the market environment, we will implement a liquidation mechanism to ensure the health of the pledge pool.
5: One of the main directions of Linear Finance recently is to use Binance Smart Chain or BSC. Why did you choose this option? Will other public chains be considered in the future?
Binance Chain is compatible with the blockchain integration of the Ethereum Virtual Machine (EVM), which solves the pain points of the existing synthetic asset protocol such as high gas fees, slow transaction confirmation, and slow product updates, and supports the instantaneous transaction of multiple Liquid (synthetic asset products) Confirm and end immediately. The Binance Smart Chain is only the first compatible blockchain bottom layer of Linear cooperation, and Linear will announce more cross-chain partners in the future.
Recently, we also reached a partnership with the public chain project Nervos. The goal of the cooperation is to create a cross-chain asset solution on top of Nervos CKB to promote the development of DeFi. Our integration will include multiple aspects: according to the Nervos standard, cross-chain exchange of Ethereum-based LINA tokens/synthetic assets; using Nervos’s Layer 2 aggregator solution to package and batch process transaction orders, and at the same time construct Linear related Functions to improve transaction throughput and reduce transaction fees without affecting transaction security, which will be guaranteed by Nervos Layer 1 (CKB).
6: Does Linear Finance and Binance already have close cooperation? What is the specific content?
Now we are mainly cooperating in BSC compatibility, and we are also exploring feasibility from different angles, such as DeFi Grant and centralized exchanges.
7: At present, a private placement of 1.8 million US dollars has been completed. Can you tell us about the investors, what do you think are their reasons for investing? What is more impressive?
The financing was led by 6 strategic investment institutions, including the well-known blockchain venture capital firm NGC Ventures, the cryptocurrency quantitative fund company Alameda Research, the well-known Korean blockchain investment company Hashed, the trading service provider CMS Holdings, and the top OTC digital Genesis Block, an asset trading platform, and Kenetic Capital, a venture capital firm focused on blockchain technology.
Today DeFi is bringing a major change to the cryptocurrency ecosystem. Our Linear Finance will solve the pain points of the existing synthetic asset agreement, such as low efficiency, inconvenient use and high system risk. I believe that our strategic investors are choosing to embark on this journey with us because they foresee the value that Linear Finance can create in the future. They not only have the tactical knowledge and experience in the DeFi field, but also bring us opportunities and information in financial innovation, market expansion, and institutional liquidity. For this strategic investment, Tony Gu, the founding partner of NGC Ventures, commented, “We are very happy to start this journey with other well-known institutions. The extensive experience of the Linear Finance team in the field of blockchain and financial markets allows us Impressed. Creating synthetic assets is an important part of the DeFi ecosystem. We believe Linear Finance can become a leader in this field.”
9: Can you introduce the team of Linear Finance and you personally?
The main members of the team are graduates from famous universities such as the United States and Hong Kong, and have decades of experience in blockchain protocols, cross-chain compatibility, financial dApp, and game development; and there are also from Blackrock, Deutsche Bank, Credit Suisse, BNP Paribas He is familiar with various financial products with professionals from Standard Chartered Bank.
I am the co-founder and product leader of Linear Finance. I have many years of experience in the field of cryptocurrency and blockchain. I am also the chief product officer of Liquefy, a leading financial technology platform in the field of asset tokenization in Asia. I am designing and executing asset securitization. Rich experience in trading.
I have worked in HSBC Global Markets and Deutsche Bank for more than three years. During my tenure at HSBC, I provided corporate clients with foreign exchange and exchange rate solutions to meet their cash flow and hedging needs. During my tenure at Deutsche Bank, I belonged to the trade finance team of large Asian and local companies.
Another co-founder, Kevin Tai, previously worked in Silicon Valley, focusing on mergers and acquisitions in the field of enterprise software and mobile applications. He has more than 13 years of experience in the banking industry (Credit Suisse, Standard Chartered, etc.), and has extensive experience in structured products, especially alternative assets. Kevin graduated from the University of California, Berkeley, is also an alumnus of Harvard Business School, and has hundreds of millions of dollars in fund management experience.
10: We have seen that FTX has also launched many real-world tokens, but it seems that marketing is greater than substance. What do you think?
FTX’s product innovation capabilities are unquestionable. In addition to the cryptocurrency index, they also launched some commodities and very interesting US presidential candidate tokens. The main reason why certain liquidity is not as strong as imagined is because for investors of “traditional cryptocurrency”, the above physical products are their “long tail” choice, which is one of the reasons for the birth of Linear ——Generate counterparties through the pledge pool to synthesize liquidity, and there is almost no slippage during operation.
11: Some people think that this wave of DeF has come to an end. What do you think? What are the future opportunities?
After every speculation, a wave of funds will be introduced, just like the “ICO wave” in 17 years has brought us many high-quality public chains and projects. On the contrary, I think a short pullback is healthy. From Bitcoin to Ethereum to DeFi, everyone can actually see that one of the best application venues for blockchain is definitely finance. In the future, DeFi will only become stronger, and cross-chain and efficient transactions will be the new normal. When the next “wave” comes, high-quality projects will become stronger, and Linear also hopes to become one of them.
12: Excellent domestic DeFi projects seem to be in a state of being scrambled. Do you think this phenomenon exists? What do you want to say to other DeFi entrepreneurs?
The DeFi boom in Asia comes later than in the West, so high-quality domestic projects are indeed very sought-after, but I think the point here is how to achieve the ultimate user experience in addition to giving a high initial value of annualized income/APY. Smooth transaction efficiency is the key to long-term organic growth of DAU (Daily Active User). Linear is looking forward to combining with different DeFi “Lego” (Lego) to form a decentralized financial network with unlimited possibilities.
(The above content does not constitute investment advice, investment needs to be cautious, please be aware of risks)
