Linea has unveiled a major update to its DeFi infrastructure with the introduction of Native Yield, a system designed to offer long-term, sustainable rewards by staking bridged Ethereum (ETH) directly through Ethereum-native protocols. This innovation aims to redefine how rewards are generated and distributed within decentralized finance while maximizing capital efficiency on the Linea network.
According to Linea, the new model is crafted to transform its platform into one of the most efficient destinations for ETH capital utilization. The approach is positioned as a direct response to prevailing inefficiencies in the DeFi landscape, which has often been driven by short-term incentives and concealed risks.
Bridging ETH with Ethereum-Native Staking
At the core of the Native Yield system lies a staking mechanism that routes bridged ETH from Linea to the Ethereum mainnet using Lido v3, a decentralized liquid staking solution. This enables bridged assets to immediately begin earning Ethereum-native yields. The staking rewards are automatically redirected into the Linea ecosystem, where they are used to fund liquidity programs and boost overall DeFi returns.
For users, the process removes the need for manual staking steps or reliance on additional custodians. The system supports instant ETH withdrawals through a protocol-level liquidity buffer, and also offers optional withdrawals in liquid staking tokens (LSTs). This simplifies participation and reduces smart contract interaction risks.
Security and Capital Efficiency as Key Pillars
Security and decentralization are embedded in the design of Native Yield. The infrastructure is completely non-custodial, ensuring that users maintain full control over their assets at all times. Permissionless access and guaranteed withdrawals strengthen user trust while eliminating the threat of third-party intervention or seizure.
Institutional players are also catered to through risk-adjusted returns and transparent performance modeling. ETH treasuries can confidently allocate capital to Linea, knowing that it contributes to both DeFi yields and Ethereum’s economic base. Meanwhile, liquidity providers benefit from a model where their bridged ETH does not remain idle but actively earns returns through dual yield channels.
— Linea.eth (@LineaBuild) August 4, 2025
Reinforcing Ethereum’s Economic Fundamentals
Native Yield also supports Ethereum’s long-term economic principles. By integrating a mechanism that burns 20% of net transaction fees in ETH, the system helps reinforce Ethereum’s deflationary nature. This design elevates ETH from a passive store of value to a productive, yield-generating asset on the Linea network.
As more participants join the ecosystem and bridge ETH into Linea, additional ETH is staked, which increases both yield distribution and liquidity incentives. This feedback loop not only amplifies on-chain activity but also aligns with Ethereum’s vision of becoming ultra-sound money.
Linea + Lido: Bringing Native Yield to L2s
With Native Yield, @LineaBuild will be integrating Lido V3 stVault infrastructure to help power its sustainable, non-custodial DeFi engine, enabling all bridged ETH to automatically earn staking rewards.
— Lido (@LidoFinance) August 4, 2025
Enhancing Ethereum, Not Competing With It
Linea has clarified that the Native Yield initiative is not an attempt to compete with Ethereum but to complement its capabilities. The platform remains fully EVM-compatible and prioritizes capital efficiency and security. The introduction of Native Yield is seen as a significant move to enhance ETH productivity and provide users with a streamlined, rewarding DeFi experience on a Layer 2 network.
With this development, Linea positions itself as a frontrunner in offering high-yield opportunities on bridged ETH, setting a precedent for how Layer 2 solutions can integrate deeply with Ethereum while driving broader ecosystem growth.
