Author: Jill, LD Capital 1. Project Introduction
Linea is a Layer 2 solution developed by ConsenSys to improve Ethereum’s scalability and efficiency. As zkEVM, Linea leverages zero-knowledge proofs with EVM equivalents, enabling developers to easily build scalable dapps or migrate existing dapps.
1. Team
Linea is a product of ConsenSys, which was founded in 2014 and is headquartered in Brooklyn, New York. It maintains good relationships with government organizations (Inter-American Development Bank, European Commission, South African Reserve Bank) and business giants (Microsoft, JPMorgan Chase) , is a leading member of crypto industry committees such as the Ethereum Alliance.
ConsenSys started as a venture capital company, but it began restructuring in 2020, splitting the company into two entities: ConsenSys Mesh and ConsenSys Software. ConsenSys Mesh is an investment entity, while Software focuses on blockchain product development. Its products include Metamask, a native crypto wallet with over 30 million monthly active users, making it the largest crypto traffic portal on the blockchain, and Infura, a blockchain development tool for developers, with over 400,000 users, making it one of the most influential and powerful companies in the Ethereum ecosystem.
Currently, Metamask has been split from ConsenSys as a separate entity, and Linea team members still work for ConsenSys, with 837 employees registered on LinkedIn. Linea can achieve seamless integration with ConsenSys products. For example, in the Metamask wallet plug-in, Linea is included by default, eliminating the experience barrier for users to manually add the network.
Source: ConsenSys official website 2. Financing
Linea has not yet conducted any separate financing. Its parent company ConsenSys has conducted four rounds of financing from 2019 to 2022, with a total amount of more than US$700 million. Participating companies include not only top crypto investment institutions Dragonfly, Coinbase Ventures, etc., but also traditional financial giants such as Microsoft, SoftBank, and Temasek.
Linea is backed by ConsenSys' rich industry resources and Metamask's huge traffic base, and it has its own industry popularity.
2. Technical Implementation 1. SNARK Proof Technology Based on Vortex
Linea uses SNARK proof technology based on Vortex. Vortex is a polynomial commitment scheme designed to implement recursive technology. It is mainly used in proof generation systems. It can generate proofs in batches to facilitate batch verification, effectively improve proof efficiency, and ensure the privacy and security of transactions.
Source: ethresear.ch
The above is the internal proof system process of Linea. In order to prove the occurrence of a transaction, Linea starts with arithmetic, converting the computer program into a mathematical expression that can be understood by zero-knowledge proof. This process converts the transaction into a trace and a set of constraints to verify the accuracy of the calculation.
Linea then uses internal proof systems Vortex and Arcane, which recursively reduce the size of the proof, continuously improving the efficiency and compactness of the proof by optimizing calculations and using specific algorithms.
Ultimately, by using recursive optimization of the internal proof system, the proof is further compressed into the external proof system gnark, and finally becomes verifiable on Ethereum.
With the surge in zero-knowledge proof projects, the main difference between projects based on SNARKs technology lies in the difference in the proving systems. Based on the maturity of the proving system and the adoption of developers, Pantheon summarizes the following most representative frameworks:
Source: Pantheon
The above proof systems are basically improvements based on Groth16 and Plonk. Pantheon conducted four benchmark tests on Linux Server (20 cores) and Mackbook M1 Pro (10 cores) devices, including the number of constraints, proof generation time, memory load, and CPU utilization. The study found that:
1) In terms of the number of constraints: Plonk framework outperforms Groth16 framework, with gnark having the most and Boojum having the least.
2) In terms of proof generation time: Groth16 framework generates proofs faster than Plonk framework, and gnark is the fastest.
3) Memory load: Not much difference.
4) CPU Utilization: gnark and Rapidsnark show the highest CPU utilization on the Linux Server device and have excellent parallelization capabilities.
The overall performance of gnark used by Linea is outstanding, with superior proof generation speed and parallelization capabilities.
The full research results can be found in "The Pantheon of Zero Knowledge Proof Development Frameworks"
2. zkEVM
zkEVM is a virtual machine that is compatible with EVM and is also friendly to zero-knowledge proofs. However, EVM itself was not designed around ZK-friendliness, so the overall state transition of Ethereum must be reconstructed using zero-knowledge proof technology. If it is more in line with Ethereum's specifications and standards, it will be easier for developers to build applications on it and integrate it into the Ethereum ecosystem, so better compatibility with Ethereum is the goal of most zkEVM projects.
Currently, the industry generally uses Vitalik's classification as a reference. Linea is in the Type 2 stage, which is completely equivalent to EVM, but not completely equivalent to Ethereum. The goal is to be fully compatible with existing applications, but to optimize transaction verification time.
It should be noted that none of the above types are superior or inferior, but rather a trade-off between the choice of development technology and the speed of generating proofs. Because the types with lower coding difficulty are more compatible with the existing infrastructure, but slower; the types with higher coding difficulty are less compatible with the existing infrastructure, but faster. Types 1 and 2 are easier to implement, but these types can also be converted.
Source: foresightnews
The solutions to the right of the above solutions have better EVM compatibility, and developers can also use familiar contract development languages and development tools, but it is more difficult to implement EVM Opcode into circuit solutions.
The Linea zkEVM solution is relatively easier to implement. Its project goal is to maximize the proof efficiency while being compatible with EVM, so as to better accommodate Ethereum developers and the ecosystem and rapidly expand ecosystem traffic.
3. Operational data 1. TVL
In July 2021, the ConsenSys team proposed to develop a SNARK-based zkEVM. In 2023, the ConsenSys zkEVM public testnet was launched and announced to be renamed Linea. The Linea mainnet Alpha version was officially launched on July 19.
Currently, the Linea cross-chain bridge has locked 17,631 ETH (worth approximately US$33 million), with 117,000 on-chain transactions and 91,000 independent users.
Source: dune analytics
Compared with other Layer2 projects, Linea's mainnet has been online for a short time, so the data is not comparable for the time being. At present, the Optimistic Rollup solution is developing rapidly, while ZK Rollup is developing slowly due to factors such as compatibility with Ethereum, efficiency of generating proofs, and transaction costs. Currently, the best-developed ZK-based Layer2 is zkSync Era, but its TVL is only 7% of Abitrum, and Linea's TVL is only 7% of zkSync Era.
Source: l2beat.com
Previously, some users reported that there seemed to be a certain delay in Linea's official cross-chain bridge processing the redemption of Layer2 to Layer1 (Ethereum). The cross-chain bridge interface claimed that the entire process would take 8 to 32 hours, but many users reported that it took 4 days to retrieve the funds.
Officials explained that in order to carefully monitor transactions and protect the security of user assets, the team initially added a withdrawal delay of at least 8 hours to Linea Mainnet Alpha. As the system matures, it will gradually decrease and eventually eliminate artificial delays. Due to the rapid increase in bridged assets, Ethereum withdrawal time has temporarily increased. The team is working to speed up transactions from L2 to L1 bridged assets. In the next few days, it will return to the goal of 8-32 hours, and all pending transactions will be processed.
2. Linea Voyage
Linea launched the testnet Voyage event on May 2, which lasted for 9 weeks and attracted more than 300,000 addresses to participate. Since the start of the event, the activity of funds on the chain has increased significantly due to the anticipation of airdrops.
Source: dune analytics
On the day of the mainnet launch, Linea announced that it would provide NFT rewards to users who participated in the Odyssey event. This time, 352,000 NFTs were airdropped to users. NFTs are divided into 5 levels. The first four levels are directly airdropped to the user's wallet, and the fifth level requires manual casting. Casting is now open for a limited time of one month. Based on Odyssey points, users can obtain NFTs of different levels.
3. Social Media 4. Ecosystem
Linea mainnet currently has 56 ecosystems connected, and 106 ecosystems are about to be connected. According to defillama data, the current TVL scale is 15.04 million US dollars. This section will briefly introduce the native protocols with a certain scale:
Source: defillama.com 1. LineaBank
LineaBank is a native lending protocol built on Linea that focuses on privacy protection and scalability. The protocol gives users full control over their assets and eliminates intermediaries through a decentralized market, providing users with competitive interest rates. According to defillama data, LineaBank is currently the project with the highest TVL on Linea, with a funding scale of US$8.44 million.
Economic Model
The total number of LAB tokens is 100 million, and the token distribution is as follows. LAB will provide airdrops to the community, and the tokens allocated to initial liquidity participants and IDO will be unlocked after TGE. The tokens allocated to other parties have different lock-up periods.
Source: LineaBank official document
The LineaBank protocol revenue reserve ratio is 80%, which means that 20% of the protocol revenue will be allocated to liquidity providers, and 80% of the 80% allocated to the protocol, or 64%, will be distributed to LAB stakers every week. However, LAB stakers can only claim LAB tokens when claiming their share of protocol revenue, because the protocol will automatically repurchase LAB tokens with assets such as ETH or USDC and distribute them to users.
LineaBank will conduct an IDO from August 7 to August 14, allocating a total of 5 million tokens and aiming to raise 400 ETH. Based on the current price of $1864/ETH, $0.15/LAB.
Source: LineaBank official website
LineaBank held a "pre-mining" event after the Linea mainnet was launched, from July 19 to August 11. Participating users can get 3,000,000 $LAB (3% of the total, or 450,000 US dollars). This part of the tokens can be claimed after the IDO.
Source: LineaBank official website 2. HorizonDEX
HorizonDEX is a centralized liquidity decentralized exchange that allows users to allocate liquidity within a custom price range, allowing traders to maximize efficiency and reduce slippage. As a native project on the Linea blockchain, HorizonDEX currently has a TVL of $2.26 million.
HorizonDEX launched the "Loyalty Program" on July 19, which aims to incentivize trading and provide yHZN points rewards to traders and liquidity providers. The event will last for 14 days until August 2. Loyalty program participants will share a total of 900,000 HZN tokens based on points.
According to the data on HorizonDEX's official website, the current DEX transaction volume has reached 20.79 million US dollars, the cumulative transaction fee in 24 hours is 6,650 US dollars, and the number of transactions is about 15,000. It has grown steadily since its launch, and there has been no period of rapid growth for the time being.
Source: HorizonDEX official website
Economic Model
The total number of HZN tokens is 100 million, of which 15% is used for IDO, 8% for the team, 15% for project development, 12% for marketing, and 35% for liquidity mining. The specific allocation is as follows. Except for the IDO tokens that will be unlocked immediately after TGE, the remaining tokens have a lock-up period of 6 months or 24 months, and a total of 42.25 million tokens will be unlocked at the genesis.
Source: HorizonDEX official document
HorizonDEX conducted private and public offerings from July 26 to July 31, and was also the first project on Linea to conduct an IDO. The private round has now ended, with a goal of raising 135 ETH and a final fundraising of 143.5 ETH. The private token price was 0.000052942 ETH/HZN, which is $0.099/HZN based on the current price of $1864/ETH.
The public offering round targets 870 ETH, the current total fundraising is 240.9 ETH, and the public offering price is 0.000059036 ETH/HZN, about $0.11/HZN.
Source: HorizonDEX official website 3. EchoDEX
EchoDEX is a decentralized trading platform built on the Linea Consensys network. It is also a native project on the Linea blockchain and the first decentralized exchange (DEX) to be launched on Linea.
Economic Model
The total number of ECP tokens is 100 million, and the specific distribution of tokens is as follows, all of which have different degrees of lock-up periods. The token currently only has the staking function, and the loyalty program will be launched soon.
Source: echoDEX official document
The native protocols that are prioritized for launch in the Linea ecosystem are DEX and lending, but the economic model designs are similar. In the early days, token incentives were needed to attract liquidity. At present, LineaBank's incentive method may be more attractive to users, but it is also "speculative" liquidity. Whether it can play a first-mover advantage to retain users is still unknown. In the future, it will face incentive competition from old DeFi such as Aave and Sushi.
References
1. "ConsenSys leads the way, Linea debuts: Breaking through ZK Rollup limitations and achieving full EVM compatibility"
2. 《The Pantheon of Zero Knowledge Proof Development Frameworks》
