Lunul: Earning Projections

1. Fee Projection Thesis

Core Philosophy

Lunul aims to sustain network operations and incentivize validators while maintaining ultra-low fees to ensure accessibility and scalability. The fee structure is designed to:

1. Provide a cost-efficient platform for high-volume transactions.
2. Support the network’s operations and incentivize validators.
3. Ensure predictable and sustainable revenue streams for long-term growth.

Fee Breakdown

1. Transaction Fees

• Base Fee: $0.0002 per transaction.
  • Applies to standard transfers and simple interactions.
• Smart Contract Execution Fees: $0.002 to $0.01 per transaction.
  • Varies depending on computational complexity.
• Dynamic Adjustment: Fees dynamically adjust based on network activity to prevent congestion and prioritize critical transactions.

2. Bridge Fees

• Cross-Chain Transfers: 0.2% fee for wrapping and unwrapping assets.
  • Example: Wrapping BTC to Lunul’s private token or vice versa.
• Minimum Fee: $10 for high-value transfers to ensure liquidity stability.

3. Validator Rewards

• Validators earn 85% of transaction and bridge fees to sustain network security and incentivize participation.
• Remaining 15% contributes to a sustainability fund for ecosystem growth and infrastructure upgrades.

Revenue Projection (3-Year Estimate)

Assumptions:

• Daily Transactions: 2 million transactions within the first year, increasing to 8 million by Year 3.
• Average Fee per Transaction: $0.001.
• Bridge Transactions: 20,000 transactions/day at an average of $20 fee.

Yearly Revenue:

2. Tokenomics

Native Token: LUN

LUN is the native utility and governance token for Lunul, designed to:

• Facilitate network transactions.
• Incentivize validator participation.
• Support governance and decision-making.

Supply Overview

• Total Supply: 1 billion LUN.
• Initial Distribution:
  • Community Rewards: 10%.
  • Ecosystem Incentives: 10%.
  • Validator Rewards: 10%.
  • Investors: 10%.
  • Team and Advisors: 10%.
  • Marketing and Partnerships: 10%.
  • Reserve Fund: 5%.
  • Liquidity and Market Operations: 35%.

Emissions Plan

Validator Incentives:

• 10% of the total supply (150 million LUN) is unlocked yearly over the first three years to reward early validators.
• Validators also receive 85% of transaction and bridge fees, directly boosting their earnings.

Community Rewards:

• 20 million LUN released annually through staking rewards, airdrops, and grants.
• Rewards reduce by 5% per year to align with token scarcity principles.

Investor Allocation:

• 10% of the total supply (100 million LUN) is allocated to early investors.
• Investors purchasing tokens during the $5M seed round will receive tokens at a fixed rate of $0.05 per LUN.
• Vesting Schedule:
  • 25% unlocked at launch.
  • Remaining 75% vested linearly over 2 years to align incentives with long-term growth.

Team and Advisor Vesting:

• 10% allocation vests over 4 years with a 1-year cliff.
• Ensures long-term alignment with the project’s success.

Validator Details

• Minimum Staking Requirement: 10,000 LUN to operate a validator node.
• Hardware Requirements:
  • High-performance CPUs with 16+ cores.
  • Minimum 64GB RAM and SSD storage.
  • Reliable high-bandwidth internet connection (1Gbps).
• Rewards Distribution:
  • 85% of transaction and bridge fees.
  • Additional rewards from the validator incentives pool.
• Operational Costs:
  • Estimated monthly operational cost: $500 - $1,000 per validator node.
• ROI Projections:
  • Average annual earnings per validator (Year 1): $15,000 - $20,000.
  • Increasing to $50,000+ by Year 3 with network growth.

Utility and Governance

• Transaction Fees: LUN is used to pay all network fees.
• Staking: Validators and delegators stake LUN to secure the network and earn rewards.
• Governance: Token holders vote on protocol upgrades, parameter adjustments, and ecosystem funding.
• Bridge Operations: LUN powers bridge fees and liquidity provisioning.

Economic Sustainability

• Deflationary Measures:
  • A portion of fees (10%) is burned to reduce circulating supply over time.
• Fee Recycling:
  • Remaining fees fund ecosystem growth and validator incentives.

Future Use Cases

• Integration into privacy-focused DeFi protocols (e.g., lending, DEXs).
• Powering NFT marketplaces with anonymous transactions.
• Serving as a settlement currency for cross-chain asset transfers.

3. Governance Model

Decentralized Governance

• LUN holders participate in governance via a quadratic voting system to:
  • Approve upgrades.
  • Adjust transaction fees and validator rewards.
  • Allocate ecosystem funds.

Proposed Voting Mechanism

1. Proposal Submission: Any token holder can submit a proposal by staking a minimum amount of LUN.
2. Voting Period: Proposals are open for voting over a 14-day period.
3. Approval Threshold: A proposal passes with at least 60% of the vote and a minimum quorum of 25% token participation.

4. Funding Allocation and Emissions Summary

Year 1 Allocation:

Emission Curve:

• Emissions decrease by 20% annually, ensuring a gradual shift towards fee-driven sustainability.

This document provides an outline of Lunul’s fee model, tokenomics, and governance structure, ensuring both short-term growth and long-term sustainability. Let me know if specific sections need more detail or further refinement!