Ethereum Network Pioneers Groundbreaking Changes through Introducing Native ETH Interest, Ether Burn Functionality, and Allocating 85% of Tokens to Ecosystem
Linea, an Ethereum Layer 2 network developed by Consensys, has announced several key features designed to align closely with Ethereum’s core economic model. These include native ETH staking, a protocol-level ETH burn, and a specific token allocation plan to support ecosystem growth.
Token Allocation
The total LINEA token supply features an innovative distribution model where 85% is allocated to ecosystem support. Of this 85%, 75% is reserved for a long-term ecosystem development fund managed by the Linea Consortium, which includes members like Eigen Labs, ENS Labs, SharpLink, Status, and Consensys. 10% will go to early users of the network as an airdrop. The remaining 15% is allocated to the Consensys treasury and locked for five years to ensure long-term alignment [1][3][4].
ETH Staking
Linea introduces native ETH staking on bridged ETH, allowing stakers to earn yield native to the Ethereum asset within the L2 network. Rewards from staking are reinvested to help grow the Linea ecosystem. This feature is expected to launch by October 2025 [1][4].
ETH Burn Mechanism
Linea implements a protocol-level ETH burn on 20% of all net transaction fees collected on the network. This mechanism will reduce the ETH supply, enhancing the value accrual of Ethereum Layer 1 by making the L2 burn fees in ETH itself. This initiative aligns with Ethereum’s broader economic model, akin to EIP-1559 but uniquely applied at the Layer 2 level. The burn mechanism also supports the long-term value of Linea’s native token by reducing circulating supply pressures [1][2][3][4].
Together, these features position Linea as a Layer 2 that deeply integrates with Ethereum's base layer economics, aiming to maximize ETH capital efficiency while fostering an ecosystem aligned with Ethereum’s principles of decentralization and sustainability.
Joseph Chalom, Co-CEO of SharpLink, believes Linea's unique alignment with Ethereum will make it an important part of its future. ENS Labs is serving as a founding steward of the Linea Consortium and preparing to launch Namechain on Linea.
The remaining 80% of net transaction fees will be used to burn LINEA tokens, making the LINEA token deflationary in proportion to network activity. The Linea Consortium includes Consensys, Eigen Labs, ENS Labs, SharpLink, and Status, with other participants to be announced later.
Status Network is implementing ETH alignment via native yield to enable free transactions at scale and SNT burn mechanics that tie their token to ecosystem growth. Status Network is contributing to the Linea codebase and building a natively gasless L2 on Linea. The Linea token is intended to promote Ethereum alignment and set new standards for other projects.
The Consortium will be responsible for driving development of next-generation applications and technology for at least the next ten years.
[1] Nick Johnson, Founder and lead developer of ENS, is committed to helping steward a values-driven roadmap for Linea as a critical piece of Ethereum infrastructure. [2] Linea, an Ethereum Layer 2 network founded by Consensys, has introduced mechanisms to establish itself as the home for ETH capital. [3] Joseph Lubin, Founder/CEO of Consensys, Co-founder of Ethereum and Chairman of SharpLink, stated that Linea is the only L2 with total Ethereum compatibility, and that they want the economics to be as aligned and supportive as the technology. [4] Expected by October 2025, Linea's native bridge will allow for ETH deposits to be staked on Ethereum mainnet, enabling liquidity providers to accumulate Ethereum staking rewards.
- With the native ETH staking feature and the protocol-level ETH burn, Linea's LINEA token refers to a deflationary token, as the remaining 80% of net transaction fees will be used to burn LINEA tokens, proportional to network activity, aligning with the overall Ethereum economic model.
- Investors and users can find relevant information about finance, technology, and more on ffnews.com, where an article discusses Linea, a Consensys-developed Ethereum Layer 2 network, that aims to foster an ecosystem aligned with Ethereum’s principles of decentralization and sustainability by introducing innovative features, such as native ETH staking, a protocol-level ETH burn, and a token allocation plan for ecosystem support.
