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LunaFi Protocol
How it works...
LunaFi is a DeFi betting protocol powered by its native $LFI token. Players earn $LFI rewards for winning bets on Lunabets. Liquidity Providers earn a yield on their investment in exchange for providing liquidity. Stakers earn $LFI for participating in the platform's governance. Our goal at LunaFi is to devise an interoperable DeFi architecture thatrevolutionizes gambling. LunaFi completely removes the middleman by offering investors unprecedented access to become the house and claim a share of in-house profits.
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.
- LFI House Pool - A contract that accepts bets in LFI and serves to secure the protocol. Users 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 incentivise 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.
House Pools use community-owned “liquidity pools” to bankroll Lunabets. These liquidity pools are permissionless, transparent, and offer LFI rewards to incentivize liquidity providers to keep their tokens locked up in 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. When each bet is placed on Lunabets, a % of the expected profits are sent to the treasury contract as a comission. The treasury converts these net fees into $LFI tokens to reward vLFI stakers.
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. It is crucial that 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.
Deployed on Polygon & SX Network
We launched LunaFi on Polygon for a number of reasons:
- 1.The ‘low throughput’ issues of ETH mean the chain can only process 30 transactions a second
- 2.Polygon is a layer-two (L2) scaling platform that leverages the security benefits of ETH as well as its smart contracts while significantly improving the throughput (tx) capacity to 7200 per second with competitive gas fee
- 3.SX is a side chain of Polygon, which we will eventually move to as we handle higher bet volumes
Last modified 3mo ago