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Token Supply and Allocation

LINEA’s total supply is fixed at 72 009 990 000 tokens. Of that supply: 85 % is dedicated to the ecosystem (including users, builders and public-goods infrastructure), and 15 % is locked in the treasury of ConsenSys (locked for five years). Notably, the allocation excludes early-stage investors, VCs or special team allocations. This signals a commitment to channel value into ecosystem growth rather than insider profit.


Fee Mechanics and Dual-Burn Model

One of LINEA’s most distinctive elements is the fee structure. All gas fees on the network are paid in ETH rather than in LINEA. From net revenue (revenues minus costs) the model is: 20 % of the net ETH profits are burned as ETH, and 80 % are used to buy and burn LINEA tokens. This creates a direct feedback loop: increased usage of the network drives scarcity in both ETH and LINEA, aligning the fortunes of the layer-2 infrastructure with the underlying Ethereum ecosystem.


Ecosystem Fund and Long-Term Incentives

The 75 % portion of the supply directed toward the ecosystem fund is structured to unlock over ten years, with higher unlock rates in early years and tapering in later years. Funds are dedicated to infrastructure (nodes, audit, tooling), strategic co-development, public goods and builder grants. These design choices indicate that the network is engineered for long-term infrastructure build-out, not short-term hype cycles.


No Governance Token, Yet Alignment Through Usage

LINEA does not function as a governance token—token-holders do not obtain voting rights over the protocol. Rather, decisions around grants, emissions and ecosystem investments are made by a consortium of entities native to the Ethereum ecosystem. This removes typical investor governance incentives and places emphasis on usage, performance and community growth instead of token-holder activism.


Utility and Network Effects

Beyond pure economics, the design supports network effects. With full EVM equivalence and strong developer tooling, builders can deploy applications easily. As applications and users migrate, network activity grows, driving the dual-burn mechanism and increasing value capture for both ETH and LINEA. The economic structure thereby rewards real engagement—not just speculation.


Risk Factors and Considerations

No model is without risk. First, the dual-burn mechanism depends on sustained network activity and fee-generation; if adoption stalls, the scarcity model weakens. Second, the absence of token-holder governance may be viewed as a trade-off by those who expect token rights; accountability then relies on the consortium structure. Third, while allocations to insiders are minimal, ecosystem fund unlocking over ten years creates potential future sell-pressure that needs monitoring.


Comparative Positioning

When compared to other layer-2 roll-ups, LINEA’s economic model stands out for its explicit alignment with ETH and its ecosystem-first allocation. Many networks allocate large portions to investors or teams; LINEA deliberately structures its allocation toward long-term infrastructure and public-goods. This positions LINEA not simply as a network competitor, but as an infrastructure amplifier for Ethereum itself.


Implications for Users and Builders

For users, this design means that participating in the network—bridging assets, using dApps, contributing liquidity—can indirectly contribute to value capture through scarcity mechanics. For builders, the economic architecture offers a more predictable long-term runway: grants, builder incentives and alignment with Ethereum’s value make the ecosystem less about short-term token flips and more about infrastructure build-out.


Outlook

Looking ahead, the success of LINEA’s economic architecture will hinge on adoption and utility. If the network attracts robust dApp deployment, meaningful transaction volumes and infrastructure participation, the design mechanics may yield strong compounding value for both ETH and LINEA. Conversely, if growth is muted, the scarcity model may struggle to take effect. That said, the architecture positions LINEA among the more structurally interesting layer-2 projects in the current environment.

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