DeFi project Linear Finance confirmed suspending operations on Thursday.
Financial challenges, which intensified after Binance’s latest decision to delist native LINA, prompted the decision.
Linear Finance launched in 2019 to offer innovative synthetic asset trading.
However, it has struggled to generate substantial profits over the past year.
The project’s native token suffered a sharp following after the announcement, extending its weekly losses by 72%.
Linear Finance ceases operations
The X post clarified financial struggles as the motive behind Linear Finance’s decision.
The DeFi platform failed to thrive despite multiple efforts to fuel the project’s growth.
Linear Finance gained traction shortly after launch, experiencing a brief profitability face.
Nevertheless, it encountered increasing financial obstacles as the DeFi space evolved.
While most startups in the crypto space rely on institutional or venture capital funding, Linear Finance used contributions from its owners and token liquidations to fund its operations.
Meanwhile, the financing model has proven unreliable in the long run. The team added that Binance’s recent action to delist LINA worsened the situation, triggering massive market cap declines.
Binance delisted LINA, AST, BURGER, COMBO, and AERGO (after a routine evaluation) to ensure adherence to industry standards.
Linear Finance’s team explained:
The recent decision by Binance to delist the Lina token accelerated these challenges, resulting in a 65% reduction in market capitalization and a significant loss of the remaining operational runaway.
The significant crash left the protocol with dried liquidity, while the deteriorated market confidence left Linear Finance stranded.
Thus, the project’s key stakeholders decided to shut down Linear Finance “and have already exited their positions.”
The team has confirmed that it will provide the timelines and instructions for users with open positions across their dApps.
While Linear Finance has ended its journey, its influence in the DeFi market can be felt.
It was among the pioneers of synthetic asset trading in blockchain.
Synthetic tokens are financial instruments that expose users to various assets, including crypto and commodities, without direct ownership.
LINA price outlook
The “Notice of Closure” triggered sharp declines in LINA’s value.
The altcoin lost over 20% on its daily chart to hover at $0.0005336.
The surged 24-hour trading volume amid price declines reflects increased activity by sellers.
LINA will likely slide further as the community reacts to Linear Finance service disruption.
While some players look to leverage the altcoin’s short-term fluctuations, the current trend indicates continued struggles for LINA’s price.
Enthusiasts will watch the asset’s movements in the upcoming sessions.
Linear Finance’s downfall highlights the benefits of diversified liquidity solutions and stable financial structures in the evolving DeFi industry.
