$12 Million Raised, Yet Public Chain Linera Fails to Secure $1.5 Million from Community

Why did Linera's LNRA community round fail to meet its target even after a 10-hour extension?

Written by: ChandlerZ, Foresight News

On September 9, Layer 1 blockchain Linera announced the conclusion of its LNRA community round, where 617 participants from 69 countries submitted a total of 848,000 USDC. The minimum target for this round was 1.5 million USDC, falling short by 652,000 USDC; compared to the fundraising cap of 8 million USDC, the completion rate was only 10.6%. Each participant subscribed for an average of about 1,374 USDC.

Linera's sales page stipulated that if the subscription amount did not reach 1.5 million USDC, participants would be eligible for a full refund. The project team will return the funds to the original payment wallets, and an announcement will be made after the refund period ends. There will be no final allocation for this round of LNRA, and Linera has not clarified whether the token sale will restart or if existing rewards can be retained.

Linera was founded in 2021 by former Meta Novi researcher Mathieu Baudet. Its microchain architecture allows users or applications to run lightweight chains separately, which are then processed in parallel by validators. In its early stages, the project identified payments, messaging, gaming, and trading as application directions, and its official website currently showcases a one-minute prediction market and real-time on-chain games. The community round was originally intended to distribute LNRA before the mainnet launch and the first official operating season.

Subscription Amount Still Short by 652,000 USDC After 10-Hour Extension

The LNRA community round opened on September 1, allowing payments in USDC on the Base network, with individual participant subscriptions ranging from 100 to 100,000 USDC. Sales were conducted through Sonar, which completed identity verification. U.S. participants had to be accredited investors and accept a 12-month lock-up, while users from restricted jurisdictions were unable to participate.

This round set up two subscription pools. Holders of testnet badges entered a priority pool, while other users who passed identity verification entered an open pool; if subscriptions exceeded the quota, the priority pool was allocated first, followed by proportional distribution from the open pool. Testnet points and badges only determined the order of priority, and users still needed to complete Sonar registration and pay in USDC.

As the original end time approached, Linera stated that Sonar had set overly strict wallet filtering conditions, preventing some users from subscribing. The team subsequently relaxed the filtering rules and extended the deadline by 10 hours to September 9 at 00:00 UTC. Linera claimed that the additional time and related subscriptions would be sufficient for the project to meet its minimum target.

During the extension, Linera also increased the trading volume reward corresponding to the first 1.5 million USDC subscription amount to 50 times. For every 1 USDC subscribed, participants could receive a $50 trading volume without fees during Linera's official operating season. This volume could only offset future trading fees and could not be withdrawn as cash.

At the start of sales, this volume was designed to decrease, with early subscribers receiving 50 times the volume; the higher the total subscription amount, the lower the multiple for subsequent participants. The official announced progress as the subscription amounts reached 250,000, 400,000, and 500,000 USDC, and after the extension, the first 1.5 million USDC range was uniformly restored to 50 times.

About 12 hours before the end, the official reported subscription amount was approximately 500,000 USDC, still falling short of the minimum target by 1 million USDC. The final number increased to 848,000 USDC, with an additional 348,000 USDC, but still did not meet the threshold set for refunds.

$0.02 Comes from Eightfold Rewards, Contract Subscription Price Remains at $0.16

The total supply of LNRA is 1 billion tokens, of which 60% is allocated to community reserves, 5% for community sales, and investors and teams receive 11.3% and 13.7%, respectively. According to the sales terms updated on August 28, a maximum of 50 million LNRA tokens were to be sold in this round, with a base price of $0.16 per token, corresponding to a fully diluted valuation of $160 million, and selling all could raise $8 million.

On September 8, Linera primarily promoted an effective price of $0.02 during the final sales phase. According to the Genesis Founder reward rules, subscribers of the first 10 million LNRA tokens could receive 7 additional tokens for every token subscribed after completing a transaction on the mainnet, ultimately expanding their holdings to eight times. The $0.02 was derived from $0.16 divided by 8, with the corresponding $20 million valuation also based on the condition that all rewards were received.

The LNRA tokens raised from community sales were originally planned to be fully unlocked at the time of token generation, with U.S. participants subject to a 12-month lock-up restriction. The shares for investors and teams would be locked for 12 months after token generation, then released linearly over 24 months. If this round had been successful, the initial liquidity for community buyers would have been available before institutional investors and teams.

Ultimately, the 848,000 USDC subscription amount was entirely within the reward range for the first 1.6 million USDC. After the community round failed to meet the minimum target, participants will recover their USDC, and the originally planned LNRA allocation will also cease. Linera has not announced whether the Genesis rewards and the 50 times fee-free trading volume will continue to count towards future activities.

$12 Million Raised, 50 Million Community Sale Shares Still Pending

Linera had previously completed two rounds of seed funding, each raising $6 million, with the first round in 2022 led by a16z crypto and the follow-up funding in 2023 led by Borderless Capital, with participation from institutions such as Laser Digital Ventures, Flow Traders, GSR Markets, and Matrixport, bringing the total funding amount to $12 million.

The Archimedes testnet, set to launch in November 2024, will introduce multi-user chains and fee mechanisms, while the Babbage testnet in April 2025 will add a web client, native oracles, and EVM-compatible block headers. The Conway testnet in September of the same year will continue to add wallet connections, EVM addresses, and high-throughput configurations. The fourth phase before the mainnet will also include governance, token economics, and security audits.

The 848,000 USDC raised is approximately 7.1% of Linera's previously accumulated funding amount, and these funds will not enter the project account. After refunds are completed, Linera still needs to decide how to handle the 50 million community sale shares.

Linera's mainnet and first official operating season are still planned to launch at the end of October or November, with specific dates subject to adjustment, and the timing for token generation and distribution remains marked as pending. As of September 9, the project team has only confirmed that they will process refunds and will announce subsequent arrangements after the refund period ends.

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