Author: Zhou, ChainCatcher

On September 9, Linera announced the end of the $LNRA community funding round, raising a total of $848,000 from 617 participants across 69 countries, falling short of the minimum fundraising target of $1.5 million. The official statement mentioned that the funds have been refunded to the participants' wallets.

Linera is backed by institutions like a16z, having raised over ten million dollars in two funding rounds and was once considered a candidate for the next-generation public blockchain in the eyes of capital markets. The community round was priced at $0.16, with an official discounted price as low as $0.02, and additional incentives to attract participants; even so, the $1.5 million threshold was still not met. The market has rejected this valuation dream!

From Diem Legacy to Prediction Markets, Linera's Three Years

According to official information, Linera is a Layer 1 public blockchain that utilizes a microchain architecture, allowing each user and application to use their own lightweight execution chain for parallel processing.

From 2022 to 2023, it was positioned as a next-generation high-performance public blockchain, emphasizing real-time applications and lower latency. Founder Mathieu Baudet previously participated in FastPay-related research at Meta, and the officials claim Linera has realized that set of work into a viable chain.

During the same period, Meta also had Diem, the successor project to the earlier Libra stablecoin initiative, which was later halted due to regulatory issues. After the dissolution of the Diem team, some individuals founded Aptos and Sui, maintaining the use of Move, while Linera opted for Rust.

In terms of funding, Linera completed a $6 million seed round in June 2022, with investors including a16z, Tribe Capital, Cygni Capital, and Kima Ventures. In August 2023, it raised another $6 million, with a16z continuing to participate, alongside Borderless Capital, GSR, DFG, Matrixport Ventures, and Flow Traders. The total amount raised over both rounds was approximately $12 million.

The mainnet has yet to launch even after more than three years, while the product side later supplemented the short-cycle on-chain prediction market Linera Markets, which operates with minute-by-minute price fluctuations covering various assets such as BTC, ETH, and SOL.

In August, Baudet published a post to recalibrate the strategy, stating that fast-cycle prediction markets like five-minute BTC price fluctuations are proving to be more popular than expected, and transformed Linera Markets' one-minute rounds from a product experiment to the main narrative, mirroring paths for creating applications that generate revenue for the chain.

Officials claimed that Linera Markets had been running on the testnet for over twenty-five weeks, processing approximately 85 million transactions with over 50,000 users, additionally stating that daily participation exceeded 8,000 people.

The community round public offering was then launched, with pre-registration opening in late August, and the window officially opening on September 1, originally scheduled to close on the 8th but extended by ten hours. The minimum target was set at $1.5 million, with a hard cap of $8 million.

According to the official sales page, participants must first complete identity verification on Sonar, then purchase using USDC on the Base chain, with a minimum single purchase of $100 and a single wallet cap of approximately $100,000. U.S. investors must meet accredited investor criteria and lock their investment for twelve months, while some regions are unable to register.

Testnet badges correspond to a separate airdrop, accounting for about 1% of the total token supply; during the community round sale, users holding badges were prioritized in receiving from the reserved pool, while other users entered the open pool, and over-subscriptions were allocated proportionally.

The community round was priced at $0.16, corresponding to a fully diluted valuation of $160 million. Those purchasing the first $1.6 million would gain Founder status and, after the mainnet launch and completing one transaction in the official application before token generation, could receive rewards from the community reserve at a rate of one coin awarded for every seven claimed, with the cost equating to $0.02 per coin.

However, the results of this community sale were not favorable. On the day following the opening, subscription amounts were around 1.1% of the hard cap, many users questioned the project's prior claims regarding benchmarking top trading applications and aligning valuations with institutional rounds.

There were also opinions that the sales rules were not easy to understand, with confusion regarding the target audience and the unlocking times for additional tokens, as many addresses in Asia were blocked during the KYC process. KOL on-chain expert indicated that if Linera launched alongside Aptos and Sui in the same cycle, it might have been seen as a high-return airdrop target, but retail investors are currently less interested in institutional narratives.

Ultimately, a total of $848,000 was raised, approximately 56.6% of the minimum threshold and about 10.6% of the hard cap, with the official announcement confirming that the minimum target was not met. Chief Product Officer Ryan Trost stated that the team consists of around five members with limited expenditure, and this round aimed to distribute tokens as broadly as possible to core users who were willing to participate before the project generated any revenue. The average purchase amount from testnet users was higher than expected, but the numbers indicated that a refund was necessary for this round.

Primary Market Chill is Not Unique to Linera

Widening the perspective, Linera’s situation is not an isolated case. According to RootData statistics, from January to August 2026, the total disclosed funding in the cryptocurrency industry was approximately $11.97 billion, a year-on-year decrease of about 52.9%. Among this, the primary market raised approximately $11.52 billion, a year-on-year decrease of about 14.6%, with 329 funding events, a year-on-year decline of about 31.7%. The structure of the cryptocurrency market is changing, with the total funding amount still supported by a few large trades, and institutional investors are becoming more concentrated.

The opportunities for retail investors to directly participate in public sales have contracted more noticeably. Public sale tracking data shows that in the first quarter of 2026, ICOs, IDOs, and IEOs totaled approximately $390 million across 105 events. By early June, this number had dropped to approximately $58 million across 37 events, with both funding amounts and the number of events significantly lower than in the first quarter, which had seen around $849 million across 429 events.

This means that the primary market is willing to support early uncertainties with less money, and the remaining funds are more selective about projects.

Previously, many star projects did not perform well in the secondary market either.MegaETH was once speculated to a fully diluted valuation of $6 billion in pre-market trading, officially listing on April 30 of this year, with opening FDV between $1.6 billion to $2 billion, peaking on the day of listing, but as of the time of writing, its price has fallen back to $0.0037, with FDV reduced to $370 million, an 80% drop from its peak.

Monad raised approximately $225 million in a Series B round led by Paradigm in 2024, and then completed around $269 million in a public offering at Coinbase in November 2025. After launching, FDV reached nearly $4.7 billion but has now fallen to around $230 million, a decline of 52% from its peak.

Plasma employed the same Sonar public offering system as Linera, with a goal of $50 million but raised an actual $373 million, priced at a $500 million FDV, soaring to a historical high of $1.68 per coin on its first day of trading, before plummeting to about $0.084 at the time of writing, a 95% drop from its peak. As of writing, its fully diluted valuation is about $650 million, with the premium generated after listing almost entirely wiped out.

In the past, the primary market was willing to pay for narratives; the stories were compelling enough, and the liquidity was hot, public offerings could be fully subscribed or even oversubscribed. However, since the beginning of this year, the scale and number of public sales have declined in tandem. Linera entered asking for valuations based on old cycles and new narratives, but the overall market is no longer buying into the valuation dreams.

Narratives are Hard to Sell Now

In fact, even established public chains are facing challenges. With powerful new chains entering the market, older chains' block space is increasingly resembling homogeneous commodities, with users and transaction fees being siphoned off by a few networks with applications. Simply relying on throughput and zero-knowledge proofs has become insufficient to justify new valuations.

As a result, older chains are starting to develop products as well.

On September 8, Ethereum Layer 2 Scroll posted a progress update in its governance forum, preparing to gradually transition from a general zkEVM to a dedicated network centered around the AI product Compass, with a transition period of about nine months. This is not a formal proposal, and subsequent matters concerning network transformation that require DAO approval will be proposed separately.

Its products include the user-oriented Compass, Compass API which accesses over thirty major models, privacy layer CENO, and payment settlement product USX. The team claims that CENO has contacted over thirty potential clients, with twelve in the proof-of-concept stage, while Compass is still validating early consumer engagement.

Similar actions are not limited to this one company. MegaETH closed its speculative MegaMafia accelerator, turning to self-developed consumer applications and using revenues from its stablecoin product USDm for buybacks and burns. Arbitrum, Sei, and Sophon are also discussing how to reclaim applications and fees back onto their own books.

Xiao Feng from Wanxiang Blockchain wrote this year that about 90% of crypto projects still lack clear users, sustainable revenue, or regulatory compliance, and the next stage should focus on revenue, stability, and connections with the real economy, as white papers and performance metrics alone can no longer support valuations.

Buyers no longer bid based on the story's size; they are more concerned about whether there are users, whether there is revenue. In other words, relying solely on narratives to push FDV high has become increasingly difficult. The direction of the cryptocurrency capital market has shifted.