LineaBank's Initial Dex Offering is currently ongoing. The Linea mainnet has recently launched and as the ERC20 bridge is supported, more official tokens will start to be added. Take advantage of this opportunity to purchase $LAB, the governance token of LineaBank and the premier native money market of Linea, at a discounted rate of 20%. Additionally, you can farm an extra 200,000 $LAB during this period!
LineaBank V2: Generating Strong Revenue
After a variety of DeFi primitives appeared and disappeared, the main question in the market became: can DeFi actually generate real revenue? This was the challenge that we at LineaBank faced, and it guided us to focus on and create a Web3 product that had real demand: Lending.
Lending facilitates the connection of borrowers with lenders and generates revenue from the interest paid by borrowers. There are already major players in the market, but what does LineaBank see as the future?
We envision a revenue-sharing system. Our strategy for increasing revenue is to improve liquidity utilization by encouraging lending activity.
Now, let's take a look at the new features that will be implemented in V2 and how they will benefit LineaBank's core users. Holders of $LAB will also benefit from our robust buyback mechanism.
Main Features:
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Looping
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Adding LSD/LST markets
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Leverage Farming
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Changing the way rewards are claimed
How can we further enhance the capital utilization, generate more revenue, and leverage $LAB's buyback mechanism to increase the value of $LAB while keeping the ease and simplicity of LineaBank as it is today?
Looping
Our Lending platform provides users with the ability to take leveraged positions. To put it simply, you can deposit an asset and lend it repeatedly to increase the size of your position and gain greater exposure to the volatility of that asset.
In the LineaBank platform, User A and User B are in a provider/user situation. User A is seeking a risky high return, while User B is looking for a safe low return.
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In this scenario, User A borrows assets from User B to increase the size of their position and be exposed to higher volatility on a particular asset.
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User B, on the other hand, receives a higher capital utilization fee because their capital is lent to User A, and the size of the loan is increased by User A's.
By simplifying this process, we can significantly increase capital utilization rates. Through our upgraded one-click looping feature, we aim to help you earn higher returns on the same asset. This, combined with our veTokenomics-boosted APR, will maximize synergy.
Thanks to LineaBank's automatic buyback mechanism, the more loans we make, the more our $LAB token will increase in value.
Adding LSD/LST markets
LSDfi has been a prominent term in the DeFi scene for the past few months. LSD/LST refers to the staked version of ETH, which is used in DeFi protocols that liquidate staked ETH to create new wealth. Currently, LSD only accounts for 2.4% of the total ETH TVL. However, new DeFi protocols are emerging in the market to explore new opportunities.
Unfortunately, LSD/LST is not yet supported on the Linea chain. If these tokens are supported, LineaBank can quickly list the market and offer leveraged opportunities to smart investors searching for higher staking yields. The typical ETH staking rate is around 4.6%, so the returns from investing in this market will be significant and attractive.
Once we have enough liquidity, we can issue a 0% interest-bearing stablecoin using the market as collateral. This is LSDfi! The stablecoin issued by LineaBank will be the first interest-bearing stablecoin backed by LSD to be issued in the Linea ecosystem. Users will be able to mint the stablecoin at LineaBank using LST as collateral and freely utilize it within the Linea ecosystem to generate additional revenue.
We are already in contact with teams that are preparing to run LSD/LST on the Linea chain. Stay tuned for more good news!
Leverage Farming
Although the lending platform itself can enhance capital utilization through looping, it will eventually require an inflow of external funds. As LineaBank aims to become the largest DeFi lending protocol on Linea in the future, we plan to build the money lego in a decentralized manner with various dAPPs, through true integration with LineaBank. For instance, suppose the rewards of an ETH/USDC pool on a Dex on Linea are attractive to users. In that case, LineaBank users can indirectly make leveraged investments in that pool through LineaBank.
In the scenario mentioned above, lenders seeking a safe return can lend capital to adventurous borrowers and earn additional returns. This model, which is already familiar to DeFi users from services like Alpaca and Rodeo, will maximize the utilization of LineaBank's capital and provide more liquidity for other dApps that integrate with us. We will also generate additional revenue from the incentives generated by their pools, and the surplus will, of course, be distributed to LineaBank's $LAB stakers.
Besides, we intend to integrate our experimental leveraged money market with the primary market, which would improve the capital utilization of assets such as WBTC and USDT instead of a single ETH or USDC.
Changing the way rewards are claimed
Currently, the value of $LAB is dependent solely on innovative features like Automatic LAB Buyback & Staking to Earn Boost APR, which could potentially become unstable in the future.
Users are able to mine $LAB without any restrictions and easily sell it on the market. To address this, we plan to attach a vesting condition to the reward-claiming process. If $LAB is claimed before the vesting period in a rage-quit manner, we will impose a tax of up to 90%. We are preparing for a vesting period of 30-60 days, and if this mechanism is adopted, the value of $LAB could be further solidified. Additionally, all collected taxes will be burned immediately.
While this is an exciting tokenomics approach, it might be premature for a very early DeFi protocol like LineaBank. As LineaBank develops, we plan to implement features like the ones above in LineaBank V2 to improve the long-term price stability of $LAB.
Conclusion
The upgrade from LineaBank V1 to V2 is a significant task, but it also brings about exciting new opportunities in logic, such as the $LAB buyback mechanism mentioned in this article. This mechanism will improve TVL and increase the value of $LAB through better capital utilization.
This will create a thriving ecosystem of incentives and rewards for multiple stakeholders across the protocol. We're on track to be a robust DeFi protocol that transparently shares the fruits of its labor with its users.
We also have an ongoing IDO that will determine the value of $LAB. Here's your chance to own $LAB at a 20% discount.
About LineaBank
LineaBank is the native lending platform on Linea, ConsenSys' zkEVM chain. It is a DeFi application that allows users to securely deposit assets, lend, borrow and maximize profits in a 100% on-chain, non-custodial environment.