Linear Finance Shuts Down After 65% Token Drop

Linear Finance, a decentralized cross-chain trading protocol, has announced its decision to cease operations effective March 27, 2025. This move comes after years of financial struggles, during which the project was unable to generate sustainable returns. The closure marks the end of an initiative that aimed to innovate synthetic asset trading but ultimately succumbed to mounting economic challenges.

Linear Finance was launched in 2019 and initially experienced brief profitability. However, the project faced increasing financial difficulties over time, relying heavily on its founder and liquidations of its native token, LINA, for funding. Various efforts to revitalize the project, such as the launch of the LINA marketplace and a multi-chain perpetuals decentralized exchange (DEX), failed to gain traction.

The final blow to the project came earlier this month when a major cryptocurrency exchange announced the delisting of the LINA token. This decision resulted in a sharp 65% drop in the token’s market capitalization, effectively collapsing the protocol’s operational runway. The exchange also delisted several other tokens, including AERGO, AST, BURGER, and COMBO, without any prior vote, warning, or transparency. Linear Finance criticized this lack of transparency and community input, stating that it left the project with little room to recover.

In a statement, Linear Finance acknowledged the challenges faced throughout its operations. "Despite our ongoing efforts to innovate and build throughout the years, the project has struggled to generate sustainable returns. Outside of a brief period of profitability during our initial launch in 2019/20, Linear Finance has faced increasing financial challenges," the protocol noted. The decision to wind down operations was made collectively by stakeholders, recognizing the project's inability to overcome its financial hurdles.

The Linear Finance team has assured users that the Operations Team will provide clear timelines and step-by-step instructions for those with active positions across their decentralized applications (dApps). This closure comes at a time when other DEX protocols are also facing significant incidents, raising questions about the decentralization and sustainability of such projects. The cessation of Linear Finance operations highlights the challenges and uncertainties within the decentralized finance (DeFi) ecosystem, where projects often struggle to maintain profitability and sustainability in the face of market volatility and regulatory pressures.