Introduction

Lumia is a next-generation blockchain that provides comprehensive infrastructure throughout the entire lifecycle of Real-World Assets (RWA). It is an Ethereum Layer 2 chain built using ZK technology. Lumia combines liquidity from CEXs, DEXs, aggregators, and other RWA tokenization platforms for traders in Web3 through the use of account abstraction and intent technologies. By integrating liquidity, Lumia offers more efficient interactions and trading strategies for traders.

Funding Background

Funding Information (Source: rootdata)

Lumia has undergone two rounds of funding. The strategic funding round took place on March 7, 2024, when DWF Labs announced a strategic investment in Orion (formerly known as Lumia) and agreed to lock up ORN tokens for 12 months. On July 21, 2020, Orion (formerly known as Lumia) raised $3.45 million in funding, with the investors remaining undisclosed. [1]

Team Members

Team Members (Source:.rootdata )

The core team of Lumia consists of Kal Ali (Co-Founder), Diego Grassano (Chief Product Officer), U-Chyung Lim (Chief Business Officer), Yanush Ali (Chief Strategy Officer), and Mehmet Buyukakarsu (Business Lead). Among them, Lim and Mehmet have previously worked at Binance. Kal has also held a leadership role at the decentralized fundraising platform Avalaunch. [2]

Key Features

Super Nodes

Lumia aims to create a balanced ecosystem where both nodes and delegators play crucial roles. This approach ensures that every participant can contribute to the health and development of the network while being appropriately rewarded for their efforts.

Super nodes are an essential part of Lumia’s effort to make its Layer 2 as decentralized as possible. This decentralization effort ensures that the distributed network is more secure, transparent, and resilient against attacks or failures. Super nodes play a vital role in the Lumia liquidity ecosystem. They provide permission for the operation of the Lumia virtual machine. Additionally, they offer permissions for delegation to DAC (Data Access Committee) and DNLP (Delta Neutral Liquidity Protocol) node operators.

Lumia Super Nodes (Source: docs.lumia.org)

Users can easily participate in the super node ecosystem in various ways:

• Unlock ecosystem rewards: Receive daily ecosystem rewards after purchasing.
• Delegate to DAC nodes: Lock your super node to delegate and earn Lumia rewards.
• Delegate to liquidity nodes: Lock your super node to delegate and earn Lumia rewards.
• Node-owned liquidity: Each super node automatically participates, optimizing the use of idle assets.
• Run DNLP nodes: Operate DNLP nodes for further participation and additional rewards.
• Run DAC nodes: Operate DAC nodes for further participation and additional rewards.

zkProvers

zkProvers are key components of Zero-Knowledge (ZK) Rollups, playing a crucial role in achieving scalability and security for blockchain networks. In the Lumia chain, built on the Polygon Chain Development Kit (CDK), zkProvers are responsible for generating zero-knowledge proofs to verify the correctness of transactions executed on the Layer 2 network.

A zkProver is a dedicated software component that performs complex mathematical calculations to create concise and verifiable validity proofs of ZK Rollup state transitions. These proofs allow Layer 1 to verify the integrity of the Rollup state without re-executing all transactions, enabling scalability while maintaining security.

zkProvers are fundamental components of ZK Rollups and enable scalable and secure transaction processing on Layer 2 networks like Lumia Chain. When paired with zkEVMs like Polygon CDK, zkProvers generate concise and verifiable proofs to validate the correctness of state transitions, allowing for efficient verification on Layer 1.

Looking ahead, the vision for zkProver nodes in the Lumia Chain represents a significant step in decentralizing and scaling the proof generation process. By distributing the computational load across a dedicated node network and incentivizing participation with LUMIA tokens, Lumia Chain aims to create a more resilient, efficient, and decentralized infrastructure for zero-knowledge proof generation.

As the blockchain ecosystem continues to evolve, the development of advanced zkProver technologies and architectures (such as the ones pioneered by Lumia Chain) will play a key role in unlocking the full potential of scalable and secure decentralized applications.

Lumia’s whitepaper states that it will unveil its Gevolut-based zkProver network in Q1 2025.

Sequencers

In the field of Layer 2 (L2) scaling solutions, sequencers play a critical role in ensuring the smooth operation and high performance of the network. An L2 sequencer is a specialized node responsible for sorting and processing transactions within an L2 system (such as a rollup or sidechain).

Sequencers perform several key functions that are essential for the operation of L2:

• Transaction Sorting: The sequencer collects transactions submitted by users and arranges them in a specific order for processing and inclusion in the next batch or block. This sorting process is crucial for maintaining the consistency and determinism of the L2 state.
• Transaction Execution: Once the transactions are sorted, the sequencer executes them according to the rules and logic of the L2 system. This involves updating the network state, modifying account balances, and executing smart contract code.
• Batch Submission: After executing the transactions, the sequencer packages them into batches or blocks and submits them to the L1 blockchain. This submission process typically involves creating cryptographic commitments or hashes of the batch and recording them on L1.
• Data Availability: Sequencers are typically responsible for ensuring the availability of transaction data. They may store the complete transaction data on the L1 blockchain or use alternative data availability solutions to ensure that other participants in the network can access and verify the data.

Lumia Chain, as an L2 solution, aims to further enhance its network capabilities by developing a dedicated sequencer network—called the Sequencer Subnet (DCN).

Lumia Chain intends to create its own sequencer subnet (DCN) and collaborate within a shared sequencer network (similar to the Avalanche setup) to process transactions and generate batches for the Lumia network. This subnet will consist of multiple sequencer nodes, each contributing to the overall throughput and resilience of the system. The nodes will be carefully selected and made up of partners, market makers (MM), and institutions that have shown interest and support for Lumia.

By having a dedicated sequencer subnet, Lumia can ensure optimal performance and reliability, as the sequencers will be specifically tailored to the requirements and characteristics of the Lumia network. More importantly, this is a key milestone in transitioning Lumia Chain from its current “Stage 0” concept to the “Stage 2” concept.

Sequencer Rewards

To incentivize participation and maintain a strong sequencer network, Lumia Chain will implement a reward mechanism for sequencers. Sequencers who actively contribute to the network by processing transactions and submitting batches will be eligible to receive $LUMIA tokens as rewards.

This reward system serves several purposes:

• Incentives: By offering $LUMIA token rewards, Lumia Chain provides strong incentives for sequencers to participate in the network and diligently perform their duties. This helps ensure a stable and reliable sequencer infrastructure.
• Decentralization: The reward mechanism encourages a diverse group of participants to operate sequencer nodes, promoting decentralization and reducing dependency on a single entity for transaction processing.
• Ecosystem Growth: As sequencers earn $LUMIA tokens, they become stakeholders in the Lumia Chain ecosystem. This alignment of interests fosters long-term commitment and contributes to the overall development and success of the network.

Data Availability

In blockchain technology, data availability is a key element to ensuring the integrity, security, and trustworthiness of the network. It refers to the guarantee that all participants in the network can easily access all necessary data to verify transactions and rebuild the blockchain state. Without data availability, the decentralized nature of the blockchain would be compromised, making the system vulnerable to various attacks and manipulations.

Validium

Validium is a scaling solution that uses validity proofs to ensure the integrity of state transitions while storing transaction data off-chain. Unlike rollups, validium does not store transaction data on the Ethereum network, thus reducing gas fees and improving scalability.

Lumia Chain is a zero-knowledge proof (zkValidium) system that utilizes the off-chain prover of Polygon zkEVM to generate zero-knowledge proofs. These proofs are then published as validity proofs, adding a layer of trustlessness to the verification process.

The validium model in Lumia Chain inherits all the components and features of Polygon zkEVM, except for the on-chain storage of transaction data. By only storing the hash of transaction data on the Ethereum network and relying on AvailDA (and our redundant systems; DAC), Lumia Chain’s validium configuration significantly reduces gas fees compared to zkEVM rollup options.

Volition (Enhanced Validium)

Lumia Chain is introducing an innovative approach to its Polygon CDK validium configuration by incentivizing data availability (DA) light clients through a reward distribution mechanism. This enhancement aims to encourage participation and improve the decentralization and overall health of the Lumia L2 network.

The primary reasons for introducing DA node incentives are:

• Encouraging participation: By offering $LUMIA token rewards, Lumia Chain incentivizes more individuals and entities to run DA nodes and participate in the network’s data availability and validation process.
• Promoting decentralization: Allowing nodes to earn money through participation helps distribute network responsibilities and rewards a wide range of stakeholders, promoting decentralization.
• Ensuring network health: Incentivizing DA nodes based on factors like uptime and fees can improve reliability and consistent performance, contributing to the overall health and stability of the Lumia network.

Advanced Data Flow in Enhanced DAC (Source: docs.lumia.org )

Additionally, the enhanced validium data flow in Lumia Chain builds upon the existing process by adding light client DA nodes, reward distribution, and computation steps:

• Batch Formation: Sequencers collect user transactions, add them to blocks, and organize the blocks into batches while recursively computing their hash values.
• Batch Certification: Once the batch is assembled and the hash value is calculated, the sequencer forwards the batch data and its corresponding hash value to AvailDA and DAC for certification.
• Data Verification and Storage: DAC nodes and AvailDA independently verify the batch data based on the received hash values and store the verified hash values in their local networks and databases for future reference.
• Signature Generation: Light clients split the data using the Avail algorithm and “data sampling” techniques, making it available for queries. On the other hand, each DAC node generates a signature for each batch hash to verify the integrity and authenticity of the batch.
• Communication with Ethereum and Reward Distribution: The sequencer collects signatures from DAC members and the original batch hash, submitting them to the Ethereum network for validation. Meanwhile, light clients continue to provide data requests. Based on various metrics and service requests, rewards for light clients are dynamically calculated, while DAC stores the same data in a centralized database for redundancy.
• Ethereum Verification: A multi-signature smart contract on Ethereum validates the submitted data.
• Final Settlement Using Zero-Knowledge Proofs and Reward Calculation: The aggregator uses provers to prepare proofs for the batches and submits them to the Ethereum network. These proofs confirm the validity of the transactions in the batches without revealing transaction details, and the chain state is updated on Ethereum. Upon successful settlement, the reward distribution smart contract calculates the reward for each participating node based on factors such as delegated NFTs, uptime, and fees. The contract then allocates LUMIA token rewards to DAC nodes and their delegators based on the calculated amount.

By implementing this enhanced validium configuration, Lumia L2 not only retains the advantages of reduced gas fees and improved scalability but also fosters a more decentralized, participatory, and robust network. The LUMIA token rewards incentivize DA nodes to encourage active participation, ultimately contributing to the long-term success and stability of the Lumia ecosystem.

Lumia Stream

In the world of blockchain, while various narratives emerge at any given time, retaining and attracting liquidity is the foundation for a project’s support and long-term growth.

The emergence of Lumia Stream changes the game. Built natively on Lumia L2 and major EVM blockchains, it can be easily integrated through a guided SDK, helping developers focus on making their projects unique and engaging without worrying about attracting liquidity. Here’s how it works:

• Easy Access to Liquidity
  Lumia Stream aggregates liquidity from both centralized exchanges (CEX) and decentralized exchanges (DEX), bringing together the entire cryptocurrency market’s liquidity. This means that developers can use the liquidity resources they need from the start, whether they require spot liquidity or permanent liquidity.

• MEV Protection
  All transactions using decentralized CEX liquidity will be protected from MEV and front-running attacks. These transactions are governed by a decentralized P2P protocol between traders and Lumia Stream liquidity nodes.

• Atomic Swap Bridge
  Lumia Stream has built an atomic swap bridge using Hash Time-Locked Contracts (HTLC) to allow trustless cross-chain bridging of native assets. The underlying cryptographic technology allows Lumia Stream to perform permissionless cross-chain swaps without worrying about the risks of minting and burning mechanisms, nor relying on multi-signature setups.

• Transmuted AMM Price Curves and Virtual Order Books
  Lumia Stream includes functionality in its SDK that allows developers to create virtual order books. These order books display paths between multiple exchanges (DEX and CEX) and Transmuted AMM price curves, enabling the virtual order book to display any type of AMM pool as quotes on the order book.

Liquidity Owned by Nodes

The liquidity owned by nodes is a crucial concept within the Lumia ecosystem, especially for Lumia L2 DAC (Data Availability Committee) nodes. Unlike regular validator nodes, which gradually accumulate rewards over time, DAC nodes receive these rewards from the start. This strategic allocation allows for instant liquidity, which is essential for facilitating large transactions on Lumia Stream.

DAC nodes validating Lumia L2 are pre-rewarded in the form of LUMIA tokens. These rewards are subject to a vesting schedule, but the liquidity is immediately available for use on Lumia Stream. The system is designed to efficiently handle large transaction volumes. Here’s an outline of the process:

• Transaction Initiation
  • A trader on Lumia Stream intends to perform a transaction to acquire XYZ tokens.
  • The available liquidity within the liquidity node on Lumia Stream is insufficient to facilitate the transaction.
• Utilizing Liquidity Owned by Nodes
  • In this case, the liquidity node will use the $LUMIA tokens owned by DAC nodes.
  • These tokens are collateralized and are in a heavily over-collateralized position in the XYZ/LUMIA lending pool.
  • The liquidity node borrows XYZ tokens using the $LUMIA tokens as collateral.
• Execution and Settlement
  • The borrowed XYZ tokens are sent to the Lumia Stream trader to complete the transaction.
  • The liquidity node then hedges the order, rebalances its portfolio, and repays the loan.
  • The entire process is carried out while maintaining a delta-neutral position for both the liquidity node and the DAC node.

The Benefits of This Process:

• Instant Liquidity
  • DAC node delegators provide idle $LUMIA tokens, offering immediate liquidity for large transactions.
  • This ensures that even multi-million dollar transactions can be settled instantly on Lumia Stream at a 1:1 CEX price.
• Actual Earnings for DAC Nodes
  • By leveraging the liquidity owned by nodes, DAC nodes can generate real earnings.
  • This adds significant value for delegators who stake $LUMIA tokens with DAC nodes.
• Enhanced Capital Efficiency:
  • Utilizing node rewards liquidity to facilitate transactions takes the capital efficiency of validator nodes to unprecedented levels.
  • The total amount of delegated $LUMIA tokens (in the millions) contributes to the TVL of Lumia Stream.

Real-World Assets (RWA) on Lumia

Real-world assets (RWA) represent tangible or intangible assets from the physical world that have been tokenized on the blockchain. Lumia chain focuses on bringing these assets on-chain, creating new opportunities for investment, liquidity, and financial innovation.

Specifically, Lumia chain specializes in tokenizing commodities such as diamonds, aluminum, copper, iron ore, silver, gold, and other precious metals.

Regulatory Compliance and Custody Protocols

The Lumia Foundation is taking significant steps to ensure the regulatory compliance and legal responsibilities of RWA tokenization:

• Obtaining Licenses: The Lumia Foundation is obtaining necessary licenses from regulators in the UAE and Australia. These licenses will provide a solid legal framework for RWA tokenization operations.
• Utilizing Custody Protocols: By leveraging custody protocols, Lumia chain can legally tokenize various commodities. Custody protocols allow the ownership of physical assets to remain with trusted custodians, while the ownership is represented by tokens, allowing seamless asset trading 24/7 on the blockchain.
• Legal Protection: Licenses for commodities and regular audit reports provide strong legal protection for asset owners and token holders, ensuring that tokenized assets are backed by real, verifiable commodities.

Tokenization Process on Lumia Chain

Lumia chain provides RWA holders with a seamless and legal process to tokenize their assets:

• Asset owners provide proof of ownership, necessary documentation, and undergo required due diligence.
• A custody agreement is established between the asset owner and the Lumia Foundation.
• The asset is appraised by an accredited third-party appraiser and tokenized on the Lumia chain.
• Tokens representing the RWA are created and can be split as needed.
• These tokens can then be used for trading or as collateral in DeFi applications.

Bringing Liquidity to RWAs

One of the main challenges RWAs face in the blockchain space is providing sufficient liquidity. Lumia chain addresses this challenge through its innovative Lumia Stream system, which connects liquidity from centralized exchanges (CEX) and decentralized exchanges (DEX).

By leveraging the Lumia Stream system, its unique liquidity provision methods, and a commitment to regulatory compliance and custody protocols, Lumia chain is set to become a leading platform for tokenizing and trading hard commodities in the DeFi space. This approach opens new investment opportunities and ensures the legal and regulatory soundness of RWA tokenization.

$LUMIA Tokenomics

$LUMIA Token Conversion

Based on Lumia’s development in the RWA and DeFi fields, its token will transition from the existing Orion Protocol token ($ORN) to $LUMIA and play a key role in the Lumia L2 ecosystem. The transition from $ORN to $LUMIA is not just a name change; it marks the evolution of the project and the expansion of its ecosystem. $LUMIA is designed to be the cornerstone of the Lumia network, offering enhanced utility and aligning with the vision for integrating RWA and DeFi platforms.

Details of the conversion:

• Conversion Ratio: 1:1 (1 $ORN = 1 $LUMIA)
  Process: For every $ORN token burned, the holder will receive 1 $LUMIA token
  Eligibility: All current $ORN token holders

Path to Unlocking $LUMIA Token

Current ORN token supply: 92,631,255, New $LUMIA token supply: 238,888,888, Token supply increase: 146,257,633.

After the token conversion, Lumia will unlock the first-quarter rewards—meaning 11,910,664 tokens will be added to circulation post-conversion. The new token supply will be vested quarterly over a 10–20 year period:

(Source: https://docs.lumia.org/lumia/lumia-token)

(Source: docs.lumia.org)

$LUMIA Token Utility

The $LUMIA token plays several crucial roles within the Lumia ecosystem:

• Native Gas Token: $LUMIA will be used to pay transaction fees on the Lumia L2 network, ensuring efficient and cost-effective operations.
• Governance: $LUMIA token holders will have voting rights to participate in the decision-making process of the Lumia platform, including key protocol upgrades and parameter changes. By staking $LUMIA tokens, users can receive $veLUMIA (voting escrowed $LUMIA), granting stronger governance rights and potential reward boosts.
• Node Staking: $LUMIA will be used for staking within network nodes, allowing token holders to contribute to network security and earn rewards.
• Providing Liquidity: $LUMIA tokens can be used in liquidity pools across the Lumia ecosystem, enabling holders to earn fees and participate in liquidity provisioning mechanisms.
• Access to Premium Features: Holding $LUMIA allows users to access advanced features on the Lumia network, enjoy transaction fee discounts, and qualify for future airdrops from partners and ecosystem projects.
• Community Incentives: This includes airdrops for early users and those integrating with the chain, funding for developers within Lumia L2, and liquidity mining programs to enhance DeFi protocol liquidity. Community incentives are essential for maintaining the efficient operation of Layer 2, with $LUMIA token issuance increasing the effectiveness of these incentives.
• Cross-Chain Interoperability: Lumia L2 focuses on cross-chain integration with partners like Polygon AggLayer, Hyperlane, and Connext. Post-issuance, $LUMIA tokens will provide liquidity for cross-chain bridges and incentivize relayers and bridge operators.

Conclusion

After the approval of spot ETFs, more and more mainstream institutions with capital are entering the cryptocurrency space, and these funds have a lower risk appetite. In this context, RWA (Real-World Asset) assets, which are linked to the real world, will be favored. As a liquidity layer for RWA and DeFi, Lumia will also benefit from this dividend effect.

However, on the other hand, Lumia’s announcement to interact with the original $ORN token using the $LUMIA token and its plan for additional issuance has been criticized by the community, as it is seen as a form of devaluation of the $ORN token.