DeFi Protocol Linear Finance Abruptly Shuts Down After Binance Delisting and Financial Losses

• Linear Finance shuts down after Binance delists LINA, causing a market cap drop.
• Binance’s delisting accelerates Linear Finance’s financial struggles, ending operations.
• Linear Finance’s reliance on token liquidations led to an unsustainable financial model.

DeFi protocol Linear Finance publicly announced its closure on March 27 after operating for nearly five years. The protocol faced financial challenges, which led to the end of the project. In its September 2020 launch the protocol initially introduced “Liquids,” which served as synthetic tokens enabling users to access commodities and forex markets. However, the system faced continuous difficulties maintaining profitability throughout its operating period.

The team announced the decision in a statement on X and its official Telegram channel. They explained that funding came from the project owner’s personal contributions and token liquidations. This strategy’s initial approach proved successful but unsustainable in the long term. The announcement detailed increased difficulties that forced the organization to make tough decisions to cease operations in previous years.

Binance Delisting Triggers Sharp Decline in LINA Token Value

A significant blow came when Binance, a major cryptocurrency exchange, delisted Linear Finance’s native token, LINA, on March 21, 2025. Effective March 28, the delisting impacted LINA alongside four other digital assets. Linear Finance stated they received no prior notice of the exchange’s decision, which caught the team off guard and worsened their financial position.

Following the delisting news, LINA’s market capitalization dropped dramatically from $14 million to under $6 million. Linear Finance’s price decreased 65% as of March 27, while trading prices declined 23% throughout this period. The market crash prompted investors to initiate bulk sales resulting in heightened trading volume. A drop in market confidence forced Linear Finance to maintain a short operational window until the decision to shut down.

Source; TRADINGVIEW

What Lies Ahead for Users and the DeFi Space

Linear Finance assured users its Operations Team would soon provide clear timelines and instructions for those with active positions on its decentralized applications (dApps). The protocol’s total value locked (TVL) has already plummeted significantly, a stark contrast to its peak of over $32 million, per DefiLlama data. This decline underscores the project’s broader challenges in maintaining relevance and liquidity.

Source; DefiLlama

The platform closure demonstrates ongoing disruptive challenges in the DeFi sector after Hyperliquid encountered a related liquidity crisis. In its farewell message, Linear Finance expressed appreciation to its community members and collaborators. The team criticized the Binance delisting process due to its lack of clear communication, which raised concerns about exchange-DeFi project relations.