Key Notes
- Linear Finance is closing its operations owing to financial troubles.
- The LINA token was recently delisted by Binance.
- Linear Finance said that its financial model became unsustainable over time.
Linear Finance, a decentralized protocol that enables the instant creation of synthetic assets, has officially announced its decision to cease operations.
This unexpected development has shocked the DeFi community, triggering a sharp sell-off in its native token, LINA, which has plummeted by 25% in the past 24 hours.
Meanwhile, according to the data from DefiLlama, the total value locked (TVL) of the protocol has crashed to a mere $79,521, significantly down from its peak levels above $32 million.
The Collapse of Linear Finance
In an official statement, Linear Finance confirmed that it had struggled to generate sustainable returns over the years, despite an initial period of profitability following its launch in 2019-2020.
The project’s financial model, which relied on personal contributions from the project owner and token liquidations, became unsustainable over time.
The final blow came from Binance’s recent decision to delist the LINA token, which wiped out 65% of its market capitalization.
This delisting drastically reduced the project’s operational runway, leaving Linear Finance with no choice but to shut down.
Market Reaction and LINA’s Price Plunge
Following the announcement, LINA’s price has taken a steep dive, currently trading at $0.0005036, marking a 25% decline in the last 24 hours, as per CoinMarketCap data.
The token’s market cap now stands at $5.03 million, while its 24-hour trading volume rose by 34.76% to $54 million, indicating panic-driven sell-offs.
Technical indicators signal further bearish momentum for LINA. The Relative Strength Index (RSI) is at 22.45, deep in the oversold territory, suggesting extreme selling pressure with little immediate signs of recovery.
The Bollinger Bands (BB) show that the price is close to the lower band ($0.00035), indicating strong downward momentum and a lack of buying interest at current levels.
A failure to hold above this lower BB could result in another massive dump for the LINA token.
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A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
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