Linear Finance
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Linear Finance

Linear Finance Twitter Spaces AMA Recap 08/12/2022

Dear Linear Community,

Late last week, Linear Finance Project Lead, Kevin Tai, held a Twitter Spaces to update the community on everything that’s been happening at Linear. Hosted by Ant, admin of the Linear Exchange Community channel on Telegram, he got to ask questions to Kevin on the LUSD/BUSD peg and the status of the Linear Council aside from several excellent questions from the community. It was definitely one not to be missed, but in case you couldn’t make please find the recap below.

Listen to the complete recording on Twitter:

Written recap:

Opening Statement

Kevin | Linear Finance: Thanks everybody for joining our Twitter Spaces. This is the first time we’ve done an AMA through TS, most likely we’ll continue doing this going forward. Previously we held a number of sessions that were on Telegram.

Before we get into the questions that were posted to myself and the team I do want to say a few things about the last few months in 2022. This year has been quite unprecedented in terms of a lot of failures, more so on the centralized finance (CeFi) part of crypto. It is quite unfortunate that that has brought down quite a lot of the value that we have generated in the crypto industry. I hope everybody has stayed safe and if you have been affected our thoughts and prayers are with you guys. I think this is a turning point where now there’s going to be a big focus on DeFi and what can DeFi really bring to the industry moving forward.

This obviously will cleanse out a lot of players, I think we’ll continue to see the contagion going on with other smaller exchanges, some of the other market makers, and other CEXs. Other than that, let’s continue to push forward with positive thoughts and continue to build in space.

Team Questions

Ant (Host): Can you give us a quick update on what the team has been working on over the last couple of months?

Kevin | Linear Finance: Yeah, for sure. The team has been working hard over the last months. We deployed our latest dApp in August, the Linear Debt Terminator, allowing users to liquidate marked accounts (P-ratio below 200).

We also made some adjustments to the P-ratio in order to allow users to claim weekly rewards with a P-ratio of 450 or above (previously 500). We understand market conditions are complicated at the moment and we want to help users be able to claim weekly rewards.

We have continued to improve Linear’s UI/UX by adding a few updates on our website including the staking rewards unlocking schedule so users can keep track of their rewards and know when they unlock. The pending timer and manual settler button for transactions were also voted on by the Linear DAO and is now live.

The team has also started work on multi-collateral so that users will soon be able to stake various assets and build LUSD.

Lastly, in terms of business development, we have partnered with a couple of projects in the space. To name a few, we partnered with decentralized risk coverage platform Bridge Mutual to allow Linear Finance users to get or provide coverage in the case of any unforeseeable event.

Ant: What is the situation with the LUSD/BUSD peg?

Kevin | Linear Finance: The team is constantly looking for ways to help stabilize the LUSD/BUSD peg. Lowering the P-ratio to claim weekly rewards to 450 is a clear example of this. Once it was implemented we were able to observe some price movement towards a 1:1 peg. But given current market conditions with many users still with a P-ratio below 450, there is still a lot of demand for LUSD that users are looking to burn to bring their P-ratio back up above 450 and claim weekly rewards.

We are exploring other possibilities like creating Peg Protection Fund using rollover weekly rewards which is something that was suggested by Linear DAO Forum user Pho. We think this is a very good idea and could potentially work further down the line, but at current market conditions with over 1,300 marked accounts that can be liquidated, demand for LUSD is still high and it seems that Peg Protection Fund would only be a temporary solution at this point.

The team is working on bringing multi-collateral to Linear Buildr. We believe this implementation will definitely help bring the peg closer to one. Since users will now be able to build LUSD with other assets and not only with LINA.

Ant: Was Linear Finance directly affected by the events of FTX and Alameda Research?

Kevin | Linear Finance: We were fortunate enough to not have been directly affected by the events of FTX and Alameda Research. The team uses a self-custody multi-sig wallet for all treasury funds, hence no funds were compromised. Our thoughts go out to everyone in the space that was affected by this. We believe this just comes to show the importance of DeFi and the importance of what many of us projects are building.

I would like to point out that despite current market conditions, the team continues to be well funded and with enough runway even though we have considerably grown the team this year. Ever since our launch, we have taken a very careful and considerate approach to make sure we continue operations regardless of market conditions.

Ant: What can the community expect from the Linear Council members?

Kevin | Linear Finance: The Linear Council is made up of Linear Finance community members and they have quite a number of tasks which they are responsible for. They help manage the Linear DAO Forum by proposing both listing and improvement propositions, making sure discussions are respectful between users.

They also do a newsletter and hold Twitter Spaces to update the community on the latest about Linear Finance.

Additionally, they evaluate potential partnerships and do an initial screening before the core team engages with other projects. As we know they’re many scams going around and the team needs to make sure we conduct proper due diligence before engaging with other projects. The LC acts as that first point of contact and will determine if the core teams should start conversations with any worthy projects where an actual use case or collaboration opportunity actually exists.

If anyone has any specific questions for them please be sure to reach out to them on Linear’s Discord server. I’m sure they will be very happy to answer any questions you may have.

Ant: What can the community expect in terms of marketing efforts?

Kevin | Linear Finance: Marketing is always very important when it comes to projects in our industry. At Linear, we believe that the best form of long-term marketing is via strengthening our fundamentals and to further developing the protocol.

Our strategy is not to engage in hyped PR releases that are only aimed at increasing the price of LINA in the short term with no substantial value behind it. We much rather focus on building and continuing to tick boxes off our roadmap and when the time is right focus our energy and resources on marketing by having built a solid protocol in the meantime.

On top of this, given the current market conditions, we believe it is best to scale down marketing efforts as it’s become apparent that marketing does not provide projects with immunity against broader market conditions, timing is key in our industry and it is something we are well aware of. So let’s just say that we will fully turn on the marketing engine when the timing is right

Community Questions

Ant: Is Linear planning to add more assets to exchange? (@elischerm)

Kevin | Linear Finance: The team is always open to adding more assets to Linear Exchange. Ever since we launched the Linear DAO earlier this year, community members have been submitting their Listing Propositions onto the DAO Forum and those that have gotten enough support from the community have been listed like LMATIC and LSOL to name a couple.

By all means, we encourage everyone to participate in the DAO. If there is an asset that you would like to trade on Linear Exchange by all means start the conversation with the community, just make sure there is a reliable price feed for said asset and if enough community members want to see it listed you can submit a proposal on Snapshot for voting.

Currently, community members are discussing adding blue chip NFT floor prices to Linear Exchange. We think this can be a great addition to the exchange since it would allow Linear users to get exposure to blue chip NFT projects such as BAYC and PUNKS without actually having to own the actual asset, which as we all know has some inherent risks, liquidity being the main one.

On this topic, the core team has already reached out to Chainlink to check the availability of the price feeds and to make sure they meet all the requirements to be implemented on Linear Exchange.

Ant: Is it planned to lower the ratio from 450% to 400% in the future? (@cabezon__2016)

Kevin | Linear Finance: The first changes to the P-ratio since we launched Linear Finance were just implemented a couple of months back in October. We reduced P-ratio to build/claim rewards from 500 to 450 this change allowed users to claim rewards and build ℓUSD at a lower P-ratio, thus increasing the amount of ℓUSD in circulation.

We are constantly monitoring this situation and how it affects the different aspects of the protocol, in particular the LUSD peg. Right after implementation, it had a positive impact on the price of LUSD and we actually achieved peg for a short period.

We believe that P-ratio changes are not to be taken lightly, it is a core component of Linear Finance and when discussing these changes with the Linear Council we came to the conclusion that it is best to modify slightly and monitor.

Adjusting the P-ratio is something that falls under the DAOs scope. So if the community feels there needs to be another change and it is well backed with valid research and data supporting the proposal and obviously, it meets the voting quorum the team would work to implement the said proposal.

Ant: Why is there no proper set up to ensure that the exchange functions without issues. (Crumbi)

Kevin | Linear Finance: Most of the time when the exchange is experiencing issues it is due to the fact that BSC nodes are not being synced correctly. When this happens it tends to be fixed relatively fast, but it is important to note that this is a BSC problem and is beyond our control.

For the graph issues on the exchange, they only apply to BAND powered assets. Earlier this year BAND made a breaking change to their smart contract and our original price tracking code no longer works for it. Basically they “optimized” the contract by removing event emission, which we’ve been using for price indexing and thus TradingView graph building.

The team is looking to migrate all of our prices feeds to be provided by Chainlink, but in the meantime, we are working on a temporary solution that continues to use BAND’s price feeds which will allow us to show the price candle chart but not the volume bar chart.

Ant: Linear Finance has a grand vision. Could you please tell us what is its development blueprint? What are the highlights in future planning worth looking forward to? (@youcan7788)

Kevin | Linear Finance: Even though we have a fully functional protocol, Linear Finance is far from complete. The team is constantly working on maintaining and further developing the platform.

The next big milestone on our roadmap is bringing multi-collateral to Linear Finance. The team is working hard at it but there’s still a lot of work to be done including code audits, so it will still be a couple of months until we release this feature. The community can rest assured that we are a team of builders and we will continue to do just that.

Ant: According to the 2022 roadmap, there was a zk rollup. When will this be implemented? (@bklove00)

Kevin | Linear Finance: This is correct. As I just mentioned in the previous answer, dev resources are focused on delivering multi-collateral staking on Linear Buildr. Not only does it comes first on our roadmap, we believe it can significantly help stabilize the LUSD peg since it will allow Linear users to build LUSD with other blue chip assets like BTC for example and not only with LINA which should increase the overall protocol P-ratio and more users to claim weekly rewards.

When it comes to integrating Linear to a zk rollup / Layer 2, know that the business team is constantly working on this. We are doing exhaustive research to help us make the correct decision on where we will build next. It is not a simple decision to make, we want to make sure we go wherever most TVL will be, but also we want to go with a solution that truly enables scalability without compromising security and decentralization.

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.

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A Decentralized Delta-One Asset Protocol with Unlimited Liquidity

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