LunaFi Protocol
How it works...
LunaFi is a DeFi betting protocol powered by the native LunaFi $LFI token. Players earn $LFI rewards for placing bets on Lunabets. LunaFi community members earn a yield on their assets in exchange for providing liquidity, stakers earn $LFI for participating in the governance of the platform.
Our goal with the LunaFi protocol was to devise an interoperable DeFi architecture that can revolutionize the way money is gambled. To achieve this outcome, we decided to rewrite the rule book.
Why? We have experienced the traditional betting system. LunaFi solves this by removing the middleman, by offering investors unprecedented access to a share of in-house profits. In the LunaFi Ecosystem, you are the house.
The smart contracts ecosystem comprises the following:
  • House Pools - A house pool contract allows liquidity provider deposits (USDC, BTC & ETH) to bankroll Lunabets and third-party dApps that integrate LunaFi.
  • TreasuryDAO - The DAO wallet store offers cold storage for treasury funds and the distribution of profits to vLFI holders.
  • Rewards Contract - Distributes $LFI tokens to players & liquidity providers.
  • $vLFI Staking - A contract that requires $LFI to be staked to participate in voting on proposals for ecosystem improvements in order to receive further $LFI token incentives. Users also receive revenues from $LFI bets + $LFI tokens from the treasury contract in return for securing the protocol.
The LunaFi ecosystem incorporates a Treasury, House Pools and community DAO. To align LunaFi's ecosystem development with community interests, 20% of the $LFI supply will be distributed as liquidity rewards to the community primarily to incentivize participation in betting, provision of liquidity, and governance.
The above shows a customer E2E experience, data flow and betting entry into the smart contracts via our protocol.

The House Pools

House Pools use community-owned “liquidity pools” to bankroll Lunabets. They are permissionless, transparent, and offer yield rewards to incentivize liquidity providers to keep their tokens within the pool, so winning bets can be paid out. The more tokens provided as liquidity within the ecosystem, the lesser the risk, yield variance, and emissions.
Yield will be supported by $LFI token emissions for 36 months.
House Pools collects 1.5% of all betting turnover which is claimable by the treasury wallet. The treasury converts these net fees via the DEX into $LFI tokens for further distribution or allocation for burning as a deflationary mechanism.
LPs who deposit USDC, BTC, or ETH into house pools provide liquidity for the smart contract. The House pool’s profit is based on a fixed margin.
The coded formula behind our sports betting pools takes into account the significant ‘jump risk’ and impermanent loss associated with all gambling markets.
It is crucial when patrons place bets, the liquidity in the house pools ensures users are paid out instantly when a bet is won. This exposure requires payout in a worst-case scenario to be factored in as pooled funds are locked, preventing liquidity providers from withdrawing their stake until all bets are paid out.
The LunaFi protocol will prevent the house from accepting bets that cannot be paid. The protocol’s hard-coded rules ensure that the deeper the pool becomes, the bigger the stake can be made, and the greater the rewards to liquidity providers.
Liquidity providers are guaranteed through assured risk exposure control and governance by a smart contract risk management system, put in place to ensure there are no disproportionate losses to the size of the pool i.e. 1% of losses to any event and correct limits on bets, security verified by aggregated oracle feeds.
Сyber Security Audit reports - Hacken
Check out our security audit from one of the world's leading cybersecurity companies here! Scoring 9.3/10!

Deployed on Polygon & SX Network

LunaFi believes Polygon is a desirable alternative chain to launch our protocol on for a number of reasons. The ‘low throughput’ issues of ETH mean it can only process 30 transactions a second. Polygon is a layer-two (L2) scaling platform that leverages the security benefits of ETH as well as its smart contracts, but significantly improves the throughput (tx) capacity to 7200 per second with competitive gas fees..