Lunul: Tokenomics Overview

Introduction

The LUN token is the native utility and governance token of the Lunul ecosystem. Designed with a robust and transparent tokenomics model, LUN ensures the sustainability, scalability, and growth of the platform while aligning incentives for all stakeholders.

Token Supply

• Total Supply: 1 billion LUN.
• Deflationary Measures:
  • 10% of transaction fees are burned, reducing the circulating supply over time.
  • Dynamic fee adjustment ensures network affordability while contributing to deflationary pressure.

Token Distribution

Investor Terms

• Seed Round:
  • Allocation: 10% of total supply (100 million LUN).
  • Price Per Token: $0.05.
  • Funding Raised: $5 million.
• Vesting Schedule:
  • 25% unlocked at launch.
  • Remaining 75% vested linearly over 2 years to ensure alignment with long-term growth.

Validator Rewards

• Purpose: Reward validators for securing the network and processing transactions.
• Emissions:
  • 10% of the total supply (100 million LUN) is unlocked yearly over the first three years.
  • Validators also earn 85% of transaction and bridge fees.
• Rewards: Designed to ensure validators achieve sustainable returns while maintaining network performance.

Community Rewards

• Allocation: 10% of total supply (100 million LUN).
• Usage:
  • Staking rewards for delegators.
  • Grants for developers building on Lunul.
  • Airdrops to incentivize ecosystem participation.
• Emission Reduction: Rewards reduce by 5% annually, ensuring scarcity as adoption grows.

Ecosystem Incentives

• Allocation: 10% of total supply (100 million LUN).
• Purpose:
  • Incentivizing ecosystem participants, including developers and partners.
  • Funding grants to promote innovation within the Lunul ecosystem.
  • Rewarding long-term engagement to drive network growth.

Liquidity and Market Operations

• Allocation: 35% of total supply (350 million LUN).
• Purpose:
  • Providing liquidity to decentralized exchanges on all chains(DEXs).
  • Supporting market-making efforts to ensure token stability and availability.
  • Funding exchange listing fees and expanding accessibility across trading platforms.
• Strategy:
  • Gradual deployment to avoid market disruptions and ensure sustainable liquidity growth.
  • Collaborative efforts with partners to enhance market visibility and adoption.

Reserve Fund

• Allocation: 5% of total supply (50 million LUN).
• Purpose:
  • Reserved for unforeseen expenses or emergencies.
  • Allocated for future opportunities and strategic investments.

Governance Model

• Governance Token: LUN holders participate in decision-making via quadratic voting.
• Proposal Submission: Requires staking a minimum amount of LUN.
• Voting Period: Open for 14 days with a minimum quorum of 25% participation.
• Use Cases:
  • Approve protocol upgrades.
  • Adjust transaction fees and validator rewards.
  • Allocate ecosystem funds.

Economic Sustainability

1. Burn Mechanism:
   • A portion of transaction and bridge fees is burned, reducing the circulating supply.
2. Fee Recycling:
   • Remaining fees fund ecosystem growth and validator incentives.
3. Scarcity:
   • Emission reductions and deflationary measures ensure long-term value appreciation.

Future Use Cases

• Privacy-focused DeFi: Lending, borrowing, and DEXs with built-in anonymity.
• NFT Marketplaces: Anonymous creation and trading of digital assets.
• Cross-Chain Settlements: Private transfers across blockchains, enhancing interoperability.

Conclusion

LUN tokenomics are designed to ensure sustainability, incentivize participation, and foster long-term growth. By aligning the interests of validators, users, and developers, Lunul sets the stage for a thriving, privacy-first blockchain ecosystem.