New Variation of Token Issuance: How does Lumoz stand out in the current node selling battle?

Last month, Lumoz announced the completion of a new round of strategic financing, with well-known traditional Mega Fund IDG and other capital participating, just about a month after completing its Pre-A round financing. Earlier, Lumoz revealed that it would conduct node sales in the near future, and the sales volume has nearly reached half, with a positive market response. In recent months, many high-quality projects have also conducted node sales. So, why are many technically strong project teams so fond of node sales recently?

The Popularity of Node Sales: A Battle is Imminent

Node sales, a new token issuance model that benefits multiple parties, have gained favor among many project teams and investors due to their flexibility, gradually becoming one of the popular financing methods in the market. Any decentralized network requires a large number of nodes to support it. Therefore, project teams can set a certain proportion of node token rewards (Node Rewards) in their Tokenmetric for node sales, while investors can obtain node token rewards by purchasing nodes for mining.

So, how should we understand node sales? Let's start with the more familiar primary and secondary markets. The primary market is the main channel for project teams to raise funds, while ordinary investors have almost no opportunity to participate in high-quality projects' primary market financing. The secondary market has no threshold restrictions, but projects in the secondary market often have high valuations, which tests investors' insight and research capabilities. Node sales can be simply understood as a 1.5-level market between the primary and secondary markets. For project teams, node sales offer more flexibility compared to the primary market, while for retail investors, it allows them to participate in early investments at a lower valuation, thus obtaining higher investment returns.

The influencing factors of node sales are similar to those of ordinary token sales. Therefore, when evaluating whether to participate in a project's node sale, in addition to fundamental research on the project itself, one should also consider 1. the proportion of node token rewards 2. the release/redemption rules of node tokens 3. the release rules of other tokens, such as those used for ecological incentives and marketing, and most importantly—the release of team and investment institution shares.

Let Data Speak: Some Data References on Lumoz

Next, let's compare several mainstream node sale projects currently in the market: Lumoz, Aethir, CARV, and Sophon, and mainly interpret how Lumoz stands out in the current node sale battle from the perspective of expected returns.

Project Overview

• Lumoz: Focused on building a modular computing layer & ZK-RaaS platform and technological innovation. Lumoz aims to simplify the use of ZK-Rollup and enhance its universality, thereby promoting the large-scale deployment of application chains based on zkEVM. Developers can easily deploy their ZK-Rollup (zkEVM) across multiple chains. For miners, Lumoz is a multi-chain PoW protocol that supports mining on various public chains and generates zero-knowledge proofs for ZK-Rollups. The innovation of the modular computing layer can efficiently utilize idle computing power in the market, thus providing modular computing support for ZK-Rollups.

• Aethir: Scalable decentralized cloud infrastructure, building GPU-based distributed computing infrastructure, breaking down barriers created by hardware, empowering AI and gaming.

• Sophon: A modular blockchain focused on the entertainment track based on zkSync. As a zkSync superchain utilizing the ZK Stack, Sophon aims to customize for any high-throughput application.

• CARV: The CARV protocol is a modular data layer that facilitates data exchange and value distribution between the gaming and AI sectors. With the CARV protocol, everyone can now own, control, verify, and monetize their data, ensuring privacy, ownership, and control firmly in the hands of individuals.

Basic Data Comparison

From the above node sales data panel, we can see that compared to the four mainstream projects, Lumoz and CARV are very generous in their node token shares, allocating 25% of the share for node sales, while Aethir and Sophon have node token shares of only 15% and 20%, respectively. The most significant factor affecting the stability of prices during the token release process is the release of shares held by the project team's team and the investment institutions during primary market financing.

In terms of token release rules, Lumoz's node tokens are released linearly over 36 months, with a 6-month lock-up period for the shares of investors from both rounds of financing, released over 36 months; the team shares have a 12-month lock-up period, released over 48 months. CARV's investor shares unlock after a 6-month lock-up, while the team shares unlock after a 9-month lock-up. Since the redemption period for its node tokens is 5 months, the node tokens begin circulating before the investor shares.

Aethir's team and investor shares both have a 12-month lock-up period, but due to the simultaneous release of 35% of GPU tokens and node tokens, the double amount of tokens may bring unavoidable inflationary pressure. In contrast, Lumoz and CARV, with more generous token distribution and friendlier release rules, may face lower inflation rates during the token unlocking process.

Expected Return Rate and Payback Period Analysis

Lumoz's Sales Plan

• Node token reward distribution plan: By purchasing Lumoz zkVerifier nodes for mining, a total of 25% of MOZ node token rewards can be obtained.

• Sales methods:

• ETH payment, supporting the Arbitrum network

• BTC payment, supporting Merlin Chain

• BNB/BTCB payment, supporting BSC network

• USDT/USDC/ZKF (10% discount available) payment, supporting Arbitrum, BSC, and ZKFair Network

• Lumoz node sales invitation mechanism: Buyers of nodes can enter an invitation code during purchase to receive a discount, which will not take effect immediately but will be refunded to the node buyer in the future. Additionally, the inviter can earn up to 10% commission.

• Refund mechanism: After 6 months from Lumoz's TGE, a refund window opens, allowing users to choose to return all produced tokens and NFTs and receive an unconditional refund of 80% of the payment amount.

Expected Return Rate and Payback Period Analysis for MOZ Node Token Holders

The above is the specific plan for Lumoz's node sales, with a limit of 100,000 nodes and a total of 10 tiers. It can be seen that the price of zkVerifier nodes increases with each round, from $200 in the first round to $704 in the last round, with a price increase of about 2.5 times. If all 100,000 nodes are sold, Lumoz will raise $40 million through node sales. For buyers of zkVerifier nodes, the expected total return from mining includes: sharing $40 million Lumoz Points (before TGE), 25% Lumoz tokens (after TGE), and potential airdrops from new chains in the Lumoz ecosystem.

As the most important part of the return composition, we will only take the MOZ node token rewards to estimate the expected returns from participating in Lumoz's node sales. Lumoz has completed three rounds of financing, and in the third round, Lumoz's valuation was $300 million. Generally, at TGE, a project's market capitalization can reach 10 times the valuation of the previous round, which for Lumoz would be $3 billion, making the total value of 25% of MOZ tokens $750 million. However, considering market sentiment and the uncertainty of market fluctuations, as well as the impact of other uncontrollable factors, we conservatively estimate the market capitalization at $1 billion, making the total value of 25% of MOZ tokens $250 million.

Further analysis of costs shows that from tier 1 to tier 10, the price of each round of node sales increases by 15%. If participating in the purchase of tier 1, the cost per node is $200; the cost for tier 3 is $265; the cost for tier 6 is $402; and the final cost for tier 10 is $704. Here we only show the number of node tokens unlocked corresponding to the first 12 months; in fact, the total unlocking will be completed over 36 months.

Total supply of MOZ tokens is 10 billion

Estimated monthly token rewards: cumulative value of rewards received by each node as of the current month

After the completion of node sales, the actual mining income from nodes depends on the number of nodes online simultaneously and the duration of being online. As shown in the figure, when there are 10,000 nodes online simultaneously, each node can earn 6,944 token rewards in the first month, while when there are 50,000 nodes online simultaneously, the first month's mining reward decreases to 1,388 tokens. This means that the more nodes are online simultaneously, the fewer token rewards each node can earn.

The total duration for all node rewards to be released is 36 months

Next, we can further estimate the yield from node mining. The table shows the expected monthly returns during the first year of participating in node mining, calculated based on a valuation of $1 billion. Assuming that a lucky participant, A, successfully purchases tier 1 at a cost of $200, the green block in the figure indicates his payback time. When the number of online nodes is 10,000, A's return rate reaches over 300% in just one month, and he can achieve a tenfold return ($2,083) by the third month. Meanwhile, participant B, who purchased a zkVerifier node in tier 6 at a cost of $402, will also break even in the first month and gain over 150% return. Additionally, within six months, participant B can achieve over tenfold returns ($4,167) through node mining.

In comparison to other projects, the payback period for XAI, which has sparked the current wave of node sales, is about 4 months. In contrast, CARV, which is most similar to Lumoz, although the value of the node tokens released in the first month is sufficient for tier 1 users to break even, the released veCARV tokens need to be redeemed for CARV to be traded, and a 150-day redemption period is required for a 1:1 redemption, thus the payback period also needs to be at least 4-5 months.

Regarding airdrop rewards, buyers of zkVerifier nodes also have the opportunity to receive airdrops from new chains supported by Lumoz, ecological partners (such as Merlin Chain, ZKFair), and airdrop rewards from invested parties. It is worth mentioning that due to the sell-off caused by token unlocking, the prices of both MERL and ZKF tokens are expected to be at a low point. As the selling pressure eases and market sentiment reverses, the expected airdrop rewards for Merlin and ZKFair, both high-quality projects with technology, background, and narrative, add to the anticipation for Lumoz's node sales.

To Make a Name, One Must Have Strength and Background

As a global distributed modular computing network, Lumoz is committed to providing advanced zero-knowledge proof (ZKP) services, supporting the development of Rollup networks, and providing powerful computing services for cutting-edge technologies such as artificial intelligence (AI). To address the current challenges of high computing costs in the field of zero-knowledge computing, the Lumoz network leverages its years of expertise in ZKP, significantly improving computing efficiency through innovative optimizations of circuits and algorithms. This effectively solves the high cost and low efficiency issues faced by Rollup projects, lowering the threshold for ordinary users to participate in the zero-knowledge computing market. On the other hand, Lumoz has also launched a modular computing layer to utilize excess computing power in the market, thus providing computing support for its ZK-rollups.

At the same time, the zkVerifier nodes launched by Lumoz also bring unprecedented convenience to users. By simply running a lightweight node, users can easily perform ZK computations and receive corresponding rewards from the network. This innovative initiative will promote the widespread application of zero-knowledge computing technology, bringing broader application prospects to the entire industry. Since 2022, Lumoz has supported over 16 Rollup projects in the test network; achieved 20,002,146 transactions; the community size has reached 440,000; and starting in 2024, it will provide ZKP-related technical support for Merlin Chain (BTC L2), ZKFair (EVM L2), Orange Chain (BTC L2), and more than 20 upcoming new chains.

The hottest narratives, unique core technologies, and strong R&D capabilities have also made Lumoz favored by the capital market. In April, Lumoz completed its Series A financing at a valuation of $120 million, led by Polychain. Other investors include top crypto-native institutions like OKX Venture and traditional dollar funds like GGV and IDG Capital, which have been active in the crypto market in recent years. Following that, at the end of May, Lumoz announced the completion of strategic round financing at a valuation of $300 million, with specific amounts undisclosed, led by IDG Blockchain, Gate Ventures, Blockchain Coinvestors, and Xia Yan Capital. This strong financing background undoubtedly adds to Lumoz's competitiveness in standing out in the node sales battle.

Conclusion

Summer is approaching, and we have endured a "long" two-month bear market. Currently, with the approval of ETH ETFs and Trump's strong statements on crypto, the market's expectations and consensus for a return to a bull market are likely to reach a new peak. Based on experience, the market generally expects that the true climax of this bull market has not yet arrived, or at least will reach the highs of March again. Driven by this somewhat optimistic sentiment, how can Lumoz, which combines topics, strength, and background, not inspire anticipation?