Linea Native Yield

Protocol Design
21

Another way to look at it , if Linea doesn’t see increased transactions, revenue will drop, and growth may stall. Because a high TVL doesn’t necessarily mean high revenue. Revenue comes from transaction fees.

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22

That’s true. One important thing to note as well is that the net income on transaction fees will be used to burn ETH and LINEA tokens. Therefore, if transaction fees increase, this benefits all ETH and LINEA holders.

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23

I have some protocol design / practical questions.
This is a few months away. Is there a specification already?

What is the best way to handle periodical distribution in a contract?
Does it need a receive function or are balances updated at lower level?
Does the yield also apply to WETH - increases WETH balances?
I’m trying to manage deposit-yield relationship. Struggling with separating the two in contract state. Will the distribution come from a specific address?
I assume yield might not be constant. Will it be distributed to all at the same time? Are there MEV concerns?

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24

Hey @parseb,

We will publish the technical specification very soon. To answer each of your questions:

  • To receive the yield, eligible users will need to claim funds on the distribution contract (with distribution rules being verified by a zk-coprocessor to ensure fairness). For users who don’t want to claim the yield manually, they should be able to use a third-party solution to claim on their behalf (which is permissionless).
  • We don’t plan to distribute yield to protocols but directly to end-users. Smart accounts should be able to claim funds through the distribution contract without any issues.
  • We don’t plan to distribute yield for passive holding of ETH or WETH, but rather to users that are actively providing liquidity on DeFi. We will publish the exact eligibility rules later on - but yes, WETH DeFi liquidity will be included.
  • Yield will be distributed at pre-defined times. We don’t see a MEV risk there since it doesn’t directly impact DeFi pools’ balances.

I hope this provides more clarity, but let me know if you have any further questions.

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25

Thank you for the answer.
Curious to see how it will preserve neutrality.

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26

When will you guys distribute the yield from native staking? Also how will it be distributed, will there be a dedicated website for example. It’s been a while since last update so wondering if there’s more visibility on native staking reward redemption

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27

More details will be shared as soon as the implementation is finalized. Keep eyes on Linea’s X account in the mean time.

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28

Hi there!

In the proposed Withdrawal and Rebalancing mechanism, when the Liquidity Buffer is insufficient and users are offered stETH sourced from an stVault, how is the rebasing nature of stETH handled?

Since stETH is a rebasing token, the liability of the stVault increases over time due to rebases. If users receive stETH as a fallback liquidity option:

  1. Who absorbs the rebasing growth of the liability?

  2. How is the stVault’s health factor protected against passive debt growth?

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