The Ethereum Layer 2 network Linea, developed by Consensys, has officially disclosed the distribution structure and purpose of its native token LINEA. According to the announcement, the token is not used for gas fees, does not grant governance rights, and was not sold to investors. Instead, it functions as an economic incentive mechanism for users, developers, and liquidity providers, aiming to support Ethereum’s long-term development.
The key feature of LINEA is that it is not a gas token. All fees on the network are paid in ETH. A portion of these fees is used in a dual burn model: 20% is allocated to reduce ETH supply, while the remaining 80% is used to buy back and burn LINEA. This creates a direct link between network activity and the value growth of both assets.
LINEA also lacks governance features. The network operates without a DAO. Key decisions regarding incentives, grants, and fund allocation will be made by the Linea Consortium - a group of native Ethereum ecosystem participants. The full charter of the Consortium will be published before the token generation event (TGE).
Total Supply and Allocation Structure
The total supply of LINEA is 72.009.990.000 tokens - 1,000 times greater than Ethereum's initial supply. Of this amount:
- 85% is allocated to ecosystem needs.
- 15% is reserved for Consensys’ treasury, subject to a five-year lockup.
At the time of launch, around 22% of the total supply will be in circulation - 15.8 billion tokens. These will be used for the airdrop to early users, liquidity provisioning, and ecosystem launch programs. The rest will either be vested or remain locked.
Airdrop and Strategic Support
From the 85% dedicated to the ecosystem:
- 9% will be allocated to users who contributed to the network’s development. These tokens will be fully unlocked at the TGE. The selection process considers both user activity and an evaluation of genuine participation.
- 1% will support key developers and ecosystem projects. Distribution will be handled manually, with a focus on long-term commitment to Linea and its protocol.
- 75% will go into the Ecosystem Fund managed by the Linea Consortium
Ecosystem Fund
The Ecosystem Fund, holding 75% of the total supply, will be the largest among Layer 2 networks. It is structured as a U.S.-based nonprofit organization and will operate in two phases:
- Activation: Support for early liquidity, preparation for exchange listings, partnerships, follow-up airdrops, and developer incentives
- Long-Term Support: Funding for research, infrastructure, and open-source software. The distribution will span 10 years following a declining emission model
About 25% of the fund will be deployed within the first 12–18 months. The remaining 50% will be gradually distributed based on sustainability and scalability.
Role of Consensys and the Treasury
Consensys will receive 15% of the tokens, which will be locked for 5 years and cannot be transferred before the lockup period ends. However, these tokens may be temporarily used within the ecosystem - for instance, in liquidity pools or staking. This ensures Consensys remains a long-term stakeholder while keeping the focus on public interest during the early years.
New Governance and Distribution Model
Linea is moving away from traditional DAO structures and token-based voting. Instead, governance will be carried out through a consortium with an approved scheme involving voting, quotas, and veto rights. This model aims to provide stability amid evolving regulatory environments.
The main focus of the tokenomics is on aligning interests: economic, institutional, and infrastructural reinforcement of Ethereum remains the top priority.
Tokenomics Announced, TGE Still Pending
Earlier, Linea’s head Declan Fox explained some of the reasons behind the delayed TGE. He stated that the postponement was due to external factors, including negotiations with centralized exchanges (CEX). Nonetheless, users were promised that a checker tool to verify token eligibility and airdrop conditions will be released a few days before the token launch.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.
