DeFi protocol Linear Finance raises $1.8 million to launch cross-chain synthetic asset exchange

Linear Finance, a decentralized finance (DeFi) protocol based in Hong Kong, has raised $1.8 million to build and launch synthetic asset exchange.

The financing round was led by NGC Ventures, Alameda Research, Hashed, and CMS Holdings, among others. Soul Capital, Moonrock Capital, and PANONY also participated in the round.

With the fresh capital in place, Linear Finance will further develop its synthetic asset protocol to launch testnet in October and mainnet in November, co-founder Kevin Tai told The Block in an interview. Synthetic assets are tokenized forms of physical assets and synthetic asset tokens are derivatives that can be traded with leverage.

Synthetix and Universal Market Access (UMA) are two of the popular synthetic asset protocols in the DeFi market today. Both these protocols are built on Ethereum and aren't compatible with other blockchains. Linear Finance, built on Ethereum, will also have cross-chain compatibility, Tai told The Block.

“We will be interoperable. We will be integrating with Binance Smart Chain to start with and two other blockchains in the near future,” said Tai, without disclosing the other two blockchains' names as partnerships with them aren't official yet. With the interoperability function, Linear Finance would be able to access Binance’s customers, said Tai.

Linear Finance would also be cheaper and faster, co-founder Drey Ng told The Block in a separate interview, referring to low gas fees and speedy oracle price feeds. With Binance Smart Chain, the oracle update frequency will be reduced to 10 seconds from the current range of three to 10 minutes, said Ng. As for gas fees, it could be only 10% of what Ethereum is charging, said Ng.

Binance Smart Chain was launched only last week and is yet to onboard a significant number of decentralized apps. When asked why Linear Finance chose this blockchain, Ng told The Block that “Binance Smart Chain is highly likely Ethereum killer.”

It is not clear whether Binance has invested in Linear Finance, Tai declined to comment when asked. As for BNB’s role in Linear Finance protocol, Ng told The Block that the coin could be one of the collaterals, in addition to Linear’s native token LINA.

As part of today’s strategic funding round, NGC Ventures’ Tony Gu and Hashed’s Ryan Kim have joined Linear Finance’s advisory board. “Synthetic asset creation is a key part of the DeFi ecosystem, and we believe Linear will emerge as a leader in this space,” said Gu.