Linea Treasury Exposed: Dumping 5B+ $LINEA Tokens Post-TGE, Price Crashes 84%

One of the posts by Tapenz.eth has added to urgent investigations into Linea following the discovery of new on-chain data that the 0x7fBE2… treasury wallet of the project was connected to the outflows of its tokens on a massive scale. According to Arkham Intelligence, the wallet contains 44.6 billion LINEA tokens, which is approximately one-fourth of the overall supply, and has already issued over 5 billion tokens since the September 2025 TGE.

These flows transmitted via intermediaries like Gnosis Safe proxies, and then they were displayed on exchanges. Critics indicate that the trend dispels the argument by Linea that it does not have third-party investors to avoid depreciation. The project instead now has accusations of creating the very sell-side pressure that it had said it was not going to create.

Dropping of Prices Enhances Frustration

The alleged dumping has been worsened by the time it was done. The perception of a prospective user holding LINEA in their hands was that they would have a higher likelihood of receiving a MetaMask-related airdrop, yet they saw the asset plummet drastically. The token has fallen by 84 percent of its all-time high of $0.05 to $0.0078, and trades on narrow daily volumes of between 20 and 40 million dollars.

As the outflows kept on increasing, X users expressed anger, saying that the group compromised its own liquidity. It did not take long before comparisons were made between Linea and other Layer 2 ecosystems in which foundation-controlled wallets sold huge quantities of tokens at times of high retail interest. Those against it claim such activities undermine long term confidence and undermine the reputation of an already competitive L2 sector.

Generalized Cynicism of Layer 2 Token Models Increases

The backlash is indicative of the increasing disappointment with Layer 2 token economics in the industry. Other initiatives, like Optimism and Arbitrum have been accused of the same in terms of foundation unlocks and strategic sales. The traders are now doubting whether the present L2 model can maintain a healthy market without having transparent distribution structures and with unlock schedule predictability.

This tension can be seen in the case of Linea. Even though the idea of the project at first offered a vision of neutrality and incentives based on community-first, the dynamism of the treasury wallet indicates otherwise. The story takes a different direction without a proper clarification, as users demand the removal of the token on big crypto exchanges unless the transparency is enhanced.

The treasury wallet of Linea controversy is a critical milestone to the project and the ecosystem of Layer 2 in general. Since the evidence has been mounting to indicate high levels of token outflows during a stage of communal anticipation, Linea is now under strain to inter-communicate issues. In the absence of enhanced transparency, retail trust in L2 tokens can be sustained to wither in the industry.