Ethereum News Today: Linea to Introduce 20% ETH Burn and Native Yield in 2025 Upgrade

Linea, an Ethereum Layer 2 solution developed by ConsenSys, has announced a significant protocol upgrade set for October 2025, which includes a protocol-level ETH burn mechanism, the introduction of native ETH yield, and a transparent token allocation model aimed at ecosystem development [1]. These upgrades are designed to enhance Ethereum’s scalability, security, and economic model by integrating more deeply with the base layer [1].

A key component of the update is the introduction of a 20% ETH burn on net transaction fees collected on the Linea network [1]. This is intended to reduce the supply of ETH and support long-term value accrual for the Ethereum mainnet [1]. Linea is the first Layer 2 solution to implement such a burn mechanism at the protocol level, aligning with Ethereum’s broader economic model, as seen in EIP-1559 [1]. Declan Fox, Head of Linea, emphasized that the protocol will burn ETH with every transaction and use the LINEA token to support users, builders, and public goods while growing the long-term value of the LINEA token-based economy [3].

In addition, Linea is introducing native ETH yield, enabling bridged ETH to earn staking rewards, which will be distributed to liquidity providers (LPs) [1]. This feature differentiates Linea from most Layer 2 solutions, which typically do not offer yield on bridged assets [1]. By combining capital efficiency with yield generation, Linea is positioning itself as one of the most attractive risk-adjusted return opportunities in the crypto space [1].

The ecosystem fund, another major component of the strategy, will allocate 85% of Linea’s token supply to the community, prioritizing builders, early users, and long-term development [1]. Specifically, 75% will go toward ecosystem development, 10% to early users, and 15% to the ConsenSys treasury with a 5-year lockup [1]. This model avoids private allocations and emphasizes transparency and community-driven growth [1].

The Linea Consortium, tasked with overseeing fund allocation and governance, includes Ethereum infrastructure projects such as EigenLayer, ENS Domains, SharpLink, Status, and ConsenSys [1]. The consortium is expected to expand in the coming months, further reinforcing Linea’s alignment with Ethereum’s long-term vision [1].

Linea’s upgrades are part of a broader trend of Ethereum-focused innovations. Ethereum continues to solidify its role as the dominant settlement layer, with over $100 billion in ETH staked and more than $25 trillion in transaction volume [1]. Projects like Linea are contributing to this momentum by introducing scalable solutions that align with Ethereum’s economic and technological goals [1].

The token model unveiled by Linea includes 22% of its total token supply circulating at genesis [2]. The model incorporates ETH as the primary gas token, reinforcing Linea’s commitment to Ethereum alignment [2]. This aligns with broader industry trends, as Ethereum’s next decade is expected to focus on scalability, security, and decentralized governance [3].

Analysts have noted that Ethereum faces potential price volatility, with the 50-period moving average suggested as a key support level to monitor [4]. However, the introduction of innovative Layer 2 solutions like Linea may provide long-term support by enhancing Ethereum’s utility and value capture [4].

Linea’s announcements represent a major step forward in the evolution of Ethereum Layer 2 solutions. By integrating ETH burns, native yield, and a transparent ecosystem fund, Linea is positioning itself as a key player in Ethereum’s ongoing expansion. These upgrades are expected to drive further adoption and innovation in the Ethereum ecosystem [1][2][3][4].

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Source:

[1] https://cryptorank.io/news/feed/e3c7a-linea-introduces-first-ethereum-layer-2-native-eth-yield

[2] https://wublock.substack.com/p/weekly-project-updates-linea-unveils

[3] https://etherworld.co/2025/08/01/highlights-from-the-all-core-developers-execution-acde-call-217/

[4] https://www.ainvest.com/news/ethereum-news-today-vitalik-buterin-proposes-10x-ethereum-scalability-2026-2508/