Linea Treasury Activity Raises Questions About Layer 2 Token Distribution Models

Source: TheCryptoUpdates Original Title: Original Link: New on-chain data has revealed some concerning activity from Linea’s treasury wallet. According to analysis from Arkham Intelligence, the wallet address 0x7fBE2… holds about 44.6 billion LINEA tokens. That’s roughly a quarter of the total supply. What’s really got people talking is that this wallet has moved over 5 billion tokens since the token generation event in September 2025.

The transfers weren’t direct, though. They went through intermediaries like Gnosis Safe proxies before appearing on exchanges. This pattern has critics saying Linea’s actions contradict their earlier statements. The project had previously argued they wouldn’t create sell-side pressure because they didn’t have third-party investors who might dump tokens. Now it looks like the treasury itself might be doing exactly that.

Price Collapse Compounds Community Frustration

The timing of these moves has made things worse. Many users held LINEA tokens hoping for potential MetaMask-related airdrops. Instead, they’ve watched the token’s value drop dramatically. From an all-time high of $0.05, LINEA has fallen to around $0.0078. That’s an 84% decline. Daily trading volumes have been pretty thin too, mostly between $20 and $40 million.

On social media, the reaction has been pretty intense. People are angry, saying the project is undermining its own liquidity. Comparisons are being made to other Layer 2 ecosystems where foundation-controlled wallets sold large amounts during periods of high retail interest. These actions, critics argue, damage long-term confidence in what’s already a competitive sector.

Growing Skepticism About Layer 2 Token Economics

This situation reflects broader concerns about Layer 2 token models. Other projects like Optimism and Arbitrum have faced similar criticism about foundation unlocks and strategic sales. Traders are starting to question whether current L2 models can maintain healthy markets without more transparent distribution structures and predictable unlock schedules.

Linea’s case is particularly interesting because the project initially presented itself as community-first with neutral incentives. The treasury wallet activity suggests a different reality. Without clear explanations, the narrative is shifting, and some users are calling for major exchanges to delist the token unless transparency improves.

I think what’s happening here shows how fragile trust can be in these ecosystems. When projects promise one thing but their on-chain behavior shows another, it creates real problems. The evidence of significant token outflows during a period when the community was expecting stability puts Linea in a tough position.

Maybe they have legitimate reasons for these moves. Perhaps it’s part of some broader strategy we don’t understand yet. But the lack of communication is making things worse. If projects don’t get better at explaining their treasury management, retail confidence in Layer 2 tokens might continue to erode.

It’s not just about Linea, really. This feels like a moment where the whole sector needs to reconsider how they handle token distribution and treasury management. Transparency shouldn’t be an afterthought—it should be built into the model from the start.