Ethereum Layer-2 Linea Reveals Token Plans, Taps SharpLink and Others for Distribution

Ethereum layer-2 network Linea wants to become the best place for ETH ecosystem capital in the future. And to further that aim, the network’s builders shared plans to launch a LINEA token for the chain with an associated ecosystem fund.

Linea creator Consensys said its plan revolves around a commitment to the Ethereum base layer with new ecosystem mechanics like native yield on bridged ETH and ETH burns. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)

It also includes the creation of the Linea Consortium—a group of Ethereum-aligned companies including publicly traded treasury company SharpLink Gaming—that will collectively steward 75% of the eventual LINEA token distribution via what the network calls the “largest Ethereum ecosystem fund by allocation.” 

“Linea is going to be the chain for ETH capital,” Declan Fox, Head of Linea at Consensys, told Decrypt. “We’re building these mechanisms in this Ethereum-centric token design and economic design to basically be the best place for ETH capital.” 

Designed to bootstrap and drive development on the network and via Ethereum, consortium members—which also include Consensys, Eigen Labs, ENS Labs, and Status—will be in charge of “thoughtfully distributing” LINEA tokens to help grow both the layer-2 network and Ethereum itself, according to Fox. 

Who might ultimately receive those tokens? 

“It’s users, it’s builders, it’s liquidity providers, it’s institutions, it’s creators… anything or anyone that’s going to help make Ethereum and Linea successful,” he said, later adding that the consortium’s full charter is expected to be published in the coming weeks, ahead of Linea’s token generation event. 

The network also plans to benefit users on-chain as well, directly burning 20% of all net transaction fees (paid in ETH) while using the remaining 80% of net fees to burn LINEA, creating a deflationary flywheel proportional to network activity.

“As Linea grows, it actually provides value back to ETH holders directly,” said Fox, who added that the network’s builders really see Linea as an extension of Ethereum. 

That network alignment was apparent to newly appointed SharpLink co-CEO Joseph Chalom, who said in a statement that “Linea’s commitment to Ethereum couldn’t be more clear,” and that its “unique alignment with Ethereum will make [Linea] an important part of its future.” 

The alignment between Ethereum and its layer-2s hasn’t always been seen as a positive though, with some investors and analysts suggesting that the scaling networks have taken value away from Ethereum’s mainnet. 

That problem was acknowledged by Ethereum co-founder Vitalik Buterin in January, who said that ecosystem developers need to “think explicitly about [the] economics of ETH,” going as far to suggest layer-2s burn a portion of their fees to support ETH—the same endeavor Linea is undertaking.

That future has seemed brighter of late, as ETH has charged back towards a price of nearly $4,000 in recent weeks, hitting a 2025 high in the process. However, it still remains more than 21% off its all-time high of $4,878 from 2021.

ETH is currently priced at $3,824. Myriad users give Ethereum a 30% chance of being above $4,000 at the end of July. (Disclosure: Myriad is a product of Decrypt‘s parent company, DASTAN.)

In Fox’s eyes, the success of Linea comes down to the success of Ethereum. 

“Our north star is really about Ethereum,” he said. “Linea success will be derived by the world believing and knowing that Ethereum is the future global layer of decentralized finance and the wider ecosystem, and also, [that] ETH is the most important digital asset in the world.” 

More specifically though? 

“For us, it will be the amount of ETH capital actively deployed on Linea mainnet,” he added. “We intend to provide the best risk-adjusted return for ETH capital.”