Disclaimer: Nansen has produced the following report in collaboration with Slice Analytics as part of its existing contract for services provided to Linea (the "Customer") at the time of publication. While Linea has the right to review and provide feedback to Nansen, Nansen maintains full editorial control over the publication of this report. All views expressed are the independent opinions of Nansen's research analyst(s) who are the author(s) named in this report. This report is intended for informational purposes only and does not serve as investment, financial, professional, or other advice. For more information, please refer to the disclaimer at the end of this report, as well as our Terms of Service.

Overview

Linea, developed by Consensys, is a Zero-Knowledge Rollup designed to address the scalability constraints on Ethereum. ZK-Rollups batch a large number of off-chain transactions and generate a mathematical proof regarding their validity. Linea is an EVM-compatible ZK-Rollup, enabling EVM developers to deploy their applications in a familiar environment. The reduction of on-chain data and execution steps also results in reduced gas fees, as Linea minimizes the number of instructions executed within the L1 EVM. Furthermore, Linea's ZK-rollup design enhances security by relying on mathematical ZKPs (Zero-Knowledge Proofs) to validate state updates. This avoids the vulnerabilities associated with challenge periods in Optimistic Rollups. Many consider ZK technology as the ‘endgame’ for blockchain scaling.

In H2 2024, Linea has made significant strides in its decentralization efforts by welcoming Status as its first external open-source contributor, and launching the Linea Association, an independent Swiss non-profit dedicated to furthering Linea's scalability, governance, and open-source development. The association will manage Linea's intellectual property and governance, paving the way for a token-based governance model planned for Q1 2025. Key highlights of Linea's progress include the massive Testnet Voyage NFT LXP Drop that rewarded loyal community members, innovations in decentralized development showcased through the Linea Dev Cook-Off with projects like OwnSound and Linea Club, and the integration of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for enhanced multi-chain capabilities. Additionally, Linea and ENS Labs announced a partnership to build Namechain, a custom Layer 2 solution leveraging Linea's zkEVM to revolutionize on-chain identity and scale Ethereum Name Service (ENS), further solidifying Linea’s position in advancing decentralized digital identities.

Key Developments: H2 2024

Linea welcomed Status as its first external open-source contributor. Status, renowned for its work on Ethereum’s Nimbus consensus client and the Waku protocol, will bolster Linea’s decentralization efforts by supporting diverse clients, enhancing sequencing and proving processes, and conducting research to further the decentralization roadmap.

Consensys has launched the Linea Association, an independent Swiss non-profit dedicated to driving the growth, open-source development, and decentralization of Linea, a zkEVM Layer-2 rollup network. The association will manage Linea’s intellectual property, treasury, and governance—laying the groundwork for a token holder governance model with the launch of the LINEA token planned by Q1 2025. With more than 1.3M verified addresses already in the ecosystem and a partner network growing from 150 to over 420, the Linea Association aims to ensure technical and social alignment within the network while supporting further innovation in Web3.

Linea introduced The Testnet Voyage NFT LXP Drop, which marks the largest and most highly anticipated LXP distribution in Linea’s history, rewarding long-standing community members who participated in the inaugural Testnet Voyage campaign. The drop, performed on November 10th, 2024, distributed LXP to Voyage NFT holders across five engagement categories—Alpha through Omega—using a stacked logarithmic approach rather than a linear scale.

The Linea Dev Cook-Off showcased two groundbreaking projects, OwnSound and Linea Club, highlighting innovative strides in decentralized development. OwnSound redefines music ownership by transforming tracks into tokenized Non-Fungible Sounds (NFS), allowing artists to earn royalties automatically through smart contracts while enabling fans to curate encrypted, private playlists. Meanwhile, Linea Club democratizes the investment landscape by offering a treasury management dApp that empowers startups and students to raise funds via decentralized voting and community-driven proposals.

Linea has integrated Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to unlock a secure and robust multi-chain ecosystem, empowering developers to build innovative cross-chain applications with enhanced security and efficiency. Leveraging Chainlink’s decentralized oracle networks and the additional safeguards of the Risk Management Network, CCIP offers defense-in-depth security, programmable token transfers, and arbitrary messaging capabilities that enable complex, multi-step interactions between blockchains.

ENS Labs and the Linea Association have announced a joint engineering partnership to build Namechain, a custom Layer 2 solution designed to scale the Ethereum Name Service (ENS) and revolutionize on-chain identity. By leveraging Linea’s advanced zkEVM technology, Namechain will offer faster, cost-effective, and low-latency transactions, addressing ENS’s unique read-heavy workload and the high costs and slow speeds of the Ethereum Mainnet. This collaboration, set to launch at the end of 2025, builds on a history of successful cooperation between ENS and Linea, and aims to simplify L2 interactions, enhance user experience, and drive broader adoption of decentralized digital identities across Ethereum’s ecosystem.

Ecosystem

DeFi

DapDap has launched the third installment of its DapDap Tales campaign series, titled "Marsh Madness Edition," marking a new milestone for DeFi on Linea. The campaign reimagines on-chain interactions by integrating Linea’s core DeFi protocols with partner services from EFrogs, Across, and Lynex, all accessible through DapDap’s d'Avinci unified in-app interface. By leveraging features such as SuperBridge for streamlined cross-chain transfers and SuperSwap for efficient trading, users can easily bridge funds, trade $CROAK, and engage with the ecosystem—all while earning rewards, including exclusive NFTs, a share of a $5,000+ reward pool, and DapDap Gems, based on their trading volume.

Splice Finance launched Linea’s first native yield trading hub, which enables users to unlock enhanced earning opportunities by splitting yield-bearing tokens into two components: Principal Tokens (PTs) for fixed yields and Yield Tokens (YTs) for variable yields. This innovative approach allows users to lock in fixed returns—by purchasing PTs at a discount that mature to a predetermined value—or capitalize on variable yields, with YTs accumulating staking rewards and bonus points until maturity. Additionally, liquidity providers benefit from extra trading fees and partner boosts, which further enriches the yield potential on the platform.

Turtle.Club introduced its Phantom Liquidity model to offer a safer alternative for liquidity boosts in DeFi by eliminating the risks associated with complex smart contracts and counterparty protocols. Instead of depositing funds into multiple layers of yield aggregators or liquid staking protocols, users simply sign a message to join Turtle, maintaining full control over their liquidity while reducing exposure to vulnerabilities and potential exploits.

NFTs & Gaming

Linea Culture SZN have come to an end, having successfully united nearly 1M participants around 23 diverse creators over a month-long celebration of Web3 art and community engagement. The event not only showcased a vibrant spectrum of NFT art—from PFPs and memes to dynamic, lore-driven creations—but also fostered organic community building, culminating in the crowning of the first-ever Linea Guilds: EFrogs, Frog Wars, Foxy, Linus and Coop Records.

EFrogs have integrated automated subdomain assignment—such as generating personalized addresses like "1.efrogs.eth". Made possible by the launch of Ethereum Name Service on Linea, the idea simplifies on-chain identity management by directly linking NFT ownership to human-readable wallet addresses via a custom L1 resolver.

Linea hosted the first edition of Linea Guild Games—a nine-day challenge where players competed for over $120k in prizes by joining one of four NFT/Meme guilds on Linea, including Efrogs, Foxy, FrogwifCat, and Linus Guild. Participants minted companions for their Game7 avatars to serve as entry tickets and engaged in the Unfettered Awakening game, where both individual and guild performances were rewarded with ETH, $SOULS, $FOXY, $WEF, and $LINUS tokens.

Enterprise & RWA

Privado ID, formerly known as Polygon ID, has launched an industry-first, chain-agnostic, and device-agnostic digital identity protocol that enables users to verify their identity once and reuse it across multiple EVM-compatible blockchains. This unified identity solution simplifies user onboarding and enhances the end-user experience by eliminating the fragmentation of blockchain identities, while also supporting seamless management via a new mobile app and upgraded web wallet. Deployed on Linea, Polygon PoS, Polygon zkEVM, and Ethereum, the protocol has formed strategic partnerships with major financial institutions like Deutsche Bank and HSBC, and is set to expand to additional networks.

MetaMask has partnered with Mastercard and Baanx to launch the MetaMask Card, a pilot debit card that enables users to spend cryptocurrency directly from their self-custodial MetaMask wallet without the need to convert crypto to fiat manually. Leveraging the Linea network for fast and efficient transactions, this innovative solution bridges the Web2-Web3 gap by allowing seamless everyday purchases anywhere Mastercard is accepted.

Lumia announced a strategic partnership with Linea, the Layer 2 scaling solution developed by the teams behind MetaMask and ConsenSys, to bring enhanced liquidity to tokenized real-world assets (RWAs). By leveraging Linea’s zk-rollup technology, which enables 100x faster transactions and over 90% cost reductions, Lumia will integrate tokenized RWAs into top DeFi platforms such as Uniswap, 1inch, and PancakeSwap, ensuring seamless trading and liquidity access.

On-chain Data

Daily Transactions

In H2 2024, Linea’s daily transaction number was mainly about consolidation. With a strong start at the beginning of the period, the numbers reached a peak of almost 1.5M daily, sustained over most of the summer. As the weather got colder, we can see a cool-off of that trend, with the average eventually settling within the 300-700k range and staying there until the end of the year.

Daily Active Addresses

Just like with transactions - Active Addresses metric displays a peak in unique users around the summer period, topping out at a little bit more than 800k daily - an astounding result, given the fierce L2 competition Linea is facing from chains such as Base, Arbitrum and others. After the summer peak, numbers eventually started to stabilize and settled in the 70-250k range, with a 320k peak in late September.

Top Entities

The Top Entities chart provides us with a comprehensive way to analyze projects based on the amount of users and transactions. In H2 2024, the most utilised on-chain service on Linea was ZeroLend, a lending protocol - with almost 380k unique addresses and over 2M transactions over the period. As a close runner-up, we have Circle, operator of USDC stablecoin, that managed to amass almost 345k unique addresses. Completing the podium, third place went to SyncSwap, the biggest Linea DEX, with over 270k users, closely followed by Stargate, an omni-chain bridging service, and WETH transactions - indicating the importance of DeFi and Decentralized Trading as a backbone of Linea’s usage.