One of Tapenz.eth’s posts added to urgent investigations into Linea following the discovery of new on-chain data that the project’s 0x7fBE2… treasury wallet was linked to outflows of its tokens on a massive scale. According to Arkham Intelligence, the wallet contains 44.6 billion LINEA tokens, which is about a quarter of the total supply, and has already issued more than 5 billion tokens since the September 2025 TGE.
These flows were transmitted through intermediaries such as Gnosis Safe proxies and then displayed on exchanges. Critics say the trend dispels Linea’s argument that it does not rely on third-party investors to avoid depreciation. Instead, the project now faces accusations of creating the same sales pressure it had said it would not create.
Falling prices increase frustration
The alleged dumping had worsened by the time it occurred. The perception of a potential user holding LINEA in their hands was that they would have a higher chance of receiving an airdrop related to MetaMask, however, they saw the asset plummet drastically. The token has fallen 84 percent from its all-time high of $0.05 to $0.0078, and is trading at low daily volumes of between $20 million and $40 million.
As outflows continued to increase, X users expressed their anger and said the group was compromising their own liquidity. It wasn’t long before comparisons were made between Linea and other Layer 2 ecosystems where foundation-controlled wallets were selling large amounts of tokens at times of high retail interest. Those against claim that such activities undermine long-term trust and undermine the reputation of an already competitive L2 sector.
Widespread cynicism about Layer 2 token models on the rise
The reaction is indicative of the growing disappointment with the economics of Layer 2 tokens in the industry. Other initiatives, such as Optimism and Arbitrum, have been accused of the same in terms of unlocking foundations and strategic sales. Traders now doubt that the current L2 model can sustain a healthy market without having transparent distribution structures and unlock schedule predictability.
This tension can be seen in the case of Linea. Although the project idea initially offered a vision of neutrality and community-first incentives, the dynamism of the treasury portfolio indicates otherwise. The story takes a different direction without proper clarification as users demand delisting of the token on large crypto exchanges unless transparency is improved.
The controversy over Linea’s treasury wallet is a critical milestone for the project and the broader Layer 2 ecosystem. As evidence has been accumulating indicating high levels of token outflows during a community anticipation stage, Linea is now under pressure to report issues. In the absence of greater transparency, retail confidence in L2 tokens may remain weak in the industry.
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