Smart Contracts and Tokenomics

Smart Contracts and Tokenomics

Lumora’s ecosystem leverages Solana-based programs and a carefully structured tokenomics model to ensure automation, transparency, and fairness across all network activities. These on-chain programs manage reward distribution, token utilization, and, in the upcoming Phase 2, will also handle task logging and task validation, maintaining an efficient and deflationary economic system.

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1. Smart Contract Design Principles

The design of Lumora’s smart contracts focuses on scalability, security, and transparency:

• Immutability: Smart contracts operate on the blockchain, ensuring all records (tasks, rewards, and transactions) are tamper-proof and auditable.

• Automation: Task management, reward calculations, and token transfers are automated, eliminating the need for intermediaries.

• Modularity: Separate contracts handle distinct operations such as task logging, reward distribution, and governance, ensuring flexibility for future upgrades.

• Gas Efficiency: Optimized contract code reduces transaction fees, enabling microtransactions for bandwidth contributions and data purchases.

• Fail-Safe Mechanisms: Built-in validation rules prevent incorrect execution and fraud.

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2. Lifecycle of Tasks in the Blockchain

1. Task Initialization:

   • A task is generated and logged on the blockchain by the Decentralized Task Manager.

   • Metadata such as task ID, data source, and execution parameters are recorded.

2. Task Assignment:

   • Nodes are selected dynamically based on bandwidth, proximity, and latency using a weighted score formula:

     Score_i = α * (B_i / B_max) + β * (1 / P_i) + γ * (1 / L_i)

3. Task Execution:

   • The assigned node performs the task (e.g., data scraping or processing) and submits proof of completion to the smart contract.

4. Task Validation:

   • The smart contract verifies task completion using cryptographic proofs (e.g., hash validation).

5. Reward Distribution:

   • Rewards are calculated and disbursed to the contributing nodes and bandwidth providers:

     R_i = C_i * R_total

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3. Proof-of-Bandwidth Mechanism

Purpose:

The Proof-of-Bandwidth (PoB) protocol ensures that rewards are distributed fairly based on validated bandwidth contributions.

Mechanism:

1. Contribution Calculation:

   • Nodes report their bandwidth usage:

     C_i = Used Bandwidth by Node i / Total Bandwidth Used

2. Validation:

   • Smart contracts verify these reports by cross-referencing task logs and network metrics.

3. Reward Allocation:

   • Tokens are distributed proportionally to validated contributions.

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4. Token Allocation and Utility

Token Supply:

• Total Supply: 1,000,000,000 Lumora Tokens.

Allocation Breakdown:

1. 80% - (800,000,000 tokens): Liquidity pools to stabilize trading and ensure ecosystem growth.

2. 15% - (150,000,000 tokens): Rewards for bandwidth providers and task executors.

3. 5% - (50,000,000 tokens): Advisory and marketing efforts.

Utility:

• Payments: Used by data consumers to purchase datasets in the decentralized marketplace.

• Staking: Users stake tokens to earn rewards or participate in governance.

• Governance: Token holders vote on network upgrades and policy changes.

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5. Liquidity Pools

Purpose:

Liquidity pools ensure smooth trading of Lumora tokens and reduce market volatility.

Design:

• Pairing: Tokens are paired with SOL on decentralized exchanges like Uniswap.

• Lock Period: Liquidity is locked for a predefined duration (e.g., 1 year) to build confidence among participants.

Benefits:

1. Trading Stability: Reduces token price volatility.

2. Market Accessibility: Ensures consistent liquidity for token buyers and sellers.

3. Ecosystem Revenue: Trading fees from liquidity pools fund network operations.

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6. Staking Mechanisms

Overview:

Staking allows users to lock Lumora tokens in smart contracts to earn rewards or participate in governance.

Mechanics:

1. Stake Pools:

   • Users deposit tokens into staking pools for a fixed duration.

   • Reward rates depend on pool size and staking duration.

2. Governance Staking:

   • Stakers receive voting power proportional to their staked tokens.

   • Votes influence decisions like protocol upgrades and allocation adjustments.

3. Reward Formula:

   R_staking = (S_i / S_total) * R_pool

   • R_staking: Rewards for staker i.

   • S_i: Tokens staked by user i.

   • S_total: Total tokens in the staking pool.

   • R_pool: Total reward pool for the staking period.

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7. Reward Decay and Deflationary Incentives

Reward Decay:

1. Mechanism:

   • Over time, the reward pool decreases to encourage early participation and long-term network sustainability.

   • Decay Formula:

     R_next = R_current * (1 - d)

     • R_next: Next reward cycle allocation.

     • R_current: Current reward allocation.

     • d: Decay rate (e.g., 5% per cycle).

2. Impact:

   • Encourages early adoption.

   • Preserves token supply for long-term growth.

Deflationary Incentives:

1. Token Burns:

   • A portion of tokens from fees or unused rewards is burned to reduce circulating supply.

2. Increased Token Value:

   • Deflationary mechanisms create scarcity, increasing token value over time.

3. Ecosystem Sustainability:

   • Reduced supply aligns with the network’s growth trajectory.

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8. Lumora’s Tokenomics

• Fair Participation: Proof-of-Bandwidth ensures equitable rewards for all contributors.

• Sustainable Growth: Liquidity pools and reward decay maintain economic stability.

• Incentive Alignment: Staking mechanisms encourage long-term engagement.

• Transparency: Smart contracts automate and record all transactions immutably on the blockchain.

This smart contract and tokenomics design ensures that Lumora operates efficiently while rewarding participants fairly and sustainably. It fosters trust, incentivizes engagement, and provides the foundation for a scalable decentralized ecosystem.