Linea Update from Declan Fox - Devconnect

All right. Uh, testing. Hi everyone. So, I'm Declan Fox. Uh, thanks Benji for the intro.

Uh, I work at Consensus where I lead the linear protocol team. Um, I have 5 minutes, so I'm, you know, going to give a quick update. I don't have an announcement per se, but what I do have is some observations on where layer 2s are heading and how I see Linear fitting in this new market environment. So, to kind of get us started, right, we need to remember that layer 2s are still very young, right? They're still in their infancy.

Um, it's only really about 2020, 5 years ago where Ethereum hit its uh capacity, gas prices spiked. Uh, we asked ourselves a question, can Ethereum scale? Okay. And this gave us the question to our first era called the infrastructure era. Right?

This is when rollups actually turned Ethereum vision into scaling into reality. Uh we built the rails. We proved that roll-ups could extend Ethereum not replace it. And then we entered what I call the scaling era. So every network racing to be faster, cheaper, and more efficient.

But efficiency has a ceiling. And when every L2 is fast and cheap, what differentiates you? And now I argue that we're entering what I call the sovereign era where layer 2's evolved from infrastructure into economies, self-sustaining governed networks that can stand on their own while remaining rooted in Ethereum. So in this sovereign era, what does a successful L2 look like? It looks like one where the economics work, where onchain revenues exceed onchain expenditures, where the network is a self- financing digital economy, not a perpetual subsidy.

That's what we're going to build with Linear, a layer 2 that finally operates like a digital network state, economically self-sufficient, transparent, and aligned with its community. In order to thrive in this sovereign era, L2s need to have real income. Linear intends to have multiple sources of income from transaction fees and me from the yield on the ETH and the bridge yield from stable coins like the Metamas stable coin MUSD from app revenue share with first and second party apps deployed on the platform from license fees from enterprises looking to deploy on the linear stack and of course from long-term token investments and protocols building in this economy. When it comes to expenditures there are only two core things. Number one, the core protocol development for Ethereum and Linear and number two, ecosystem incentives that actually have a positive ROI.

Okay, the other important thing about expenditures is the tokconomics itself with Linear because the token has no quote unquote insiders, no venture capitalists, no team allocation. There is no dilution, no constant sell pressure and overhang from the uh existing sort of mechanisms you see with tokconomics. So what we've done with linear is really designed a system and economy that compound compounds value back into itself back into the network and the token holders. We've also reimagined governance. Okay, Linear is not a DAO.

It's a consortium. It's an institution-grade governance model that combines neutrality, accountability, and speed. It's open to Ethereum organizations, enterprises and institutions who want to participate in the future of decentralized finance. Organizations that already include Sharlink, IEG layer, ETH status with many more members to come. What this does is it lets us move fast but whilst remaining accountable.

Okay, it's something that can appeal to the crypto native world and the institutional world. What about the protocol itself? How do we align this new digital network economy with token holders and citizens? We do this through a buyback and burn. Okay.

So, as the network directly increases in activity and success, so does the value that goes to the token. With linear, every transaction, 80% of the fees are used to buy back and burn the linear token with the remaining 20% used to buy back and burn ETH. Okay? So, when the linear economy grows, everyone benefits. users, builders, token holders, and the Ethereum layer 1 that all L2s rely on for security.

Of course, all of this rests on a technological foundation designed for the next generation of users with institutional-grade privacy, security, and scalability. What this means for Linear is private yet auditable transactions, deterministic finality, and throughput capable of meeting the full spectrum of consumer applications and institutional finance. So to sum it all up, we have three eras. The third was all about building the rails. The second was about making them faster and cheaper.

And the third, this new era that layer 2 is entering is called the sovereign era, which is all about making them durable. At Lineia, we don't just want to build another L2. What we're fighting to build is an economy that funds itself, aligns its stakeholders, and scales Ethereum for the real world. Welcome to the third era of layer 2os. Thank you.