Lumia (LUMIA): Bridging RWA & DeFi for a New Financial Era
Real-world assets (RWAs) are quickly becoming a leading topic within the blockchain ecosystem, with many protocols and chains starting to offer asset tokenization services. However, many of these solutions are based on simply moving a variety of physical and digital assets to a web3 environment without regard for how these tokenized on-chain products will be further utilized. As a result, after companies tokenize their assets on-chain, they realize that the lack of liquidity is hampering the assets' further circulation and adoption.
Lumia (LUMIA) is an RWA-focused Layer 2 project that has taken a much more comprehensive approach to asset tokenization. The platform allows businesses to tokenize various RWAs, including a diverse range of commodities, and provides ways to boost their liquidity and applications within the decentralized finance (DeFi) realm. Based on Polygon's modular Chain Development Kit (Polygon CDK), Lumia provides a robust, secure, compliant, cost-effective and scalable infrastructure to put RWAs to active use within the world of web3.
Having started its operations under the name of Orion Protocol (ORN) as an Ethereum (ETH)-–based app that aggregated liquidity from various centralized (CEX) and decentralized (DEX) exchanges, the project rebranded to Lumia in 2023 and expanded its functionality to focus on the RWA niche. As of late 2024, Lumia remains one of the pioneers of liquidity-enhanced RWA use on blockchain.
Key Takeaways:
Lumia (LUMIA)’s Layer 2 platform is dedicated to helping users tokenize and trade a variety of RWAs.
The Lumia platform is a zero-knowledge (ZK) rollup built using the Polygon CDK. It uses interoperability layers and other technologies to source deep liquidity for RWA trade.
The platform's native crypto, LUMIA, is used for gas fee payments, governance, node staking, liquidity provision, access to premium features and fee discounts. LUMIA can be bought on Bybit as USDT Perpetual contract.
What Is Lumia?
Lumia (LUMIA) is a Layer 2 blockchain designed for tokenization and use of RWAs in DeFi applications. The platform allows businesses to bring a variety of physical and digital assets on-chain, securely tokenize them and further use the assets for collateral provision, lending and other crypto finance use cases.
The Lumia platform's origins date back to 2020, when Orion Protocol (ORN) was launched on Ethereum. Co-founded by Alexey Koloskov and Kal Ali, Orion offered liquidity aggregation from multiple CEX and DEX platforms. In late 2023, Orion announced its rebranding to Lumia, focusing more specifically on RWAs and their active use through enhanced liquidity provision.
The project also transitioned from Ethereum to its own Layer 2 chain in October 2024, with ORN tokens to be migrated to the new platform's native token, LUMIA, at a 1:1 ratio. As of December 2024, the major crypto exchange platforms have migrated ORN to LUMIA or are in the process of migrating it.
Lumia is a zero-knowledge proof (ZKP)–based rollup network built using thePolygon CDK, a versatile, open-source blockchain development framework provided by the Polygon project. The Lumia platform is highly modular, with different components used for its execution, data availability (DA) and settlement layers.
Chain Abstraction and Account Abstraction
Lumia has partnered with Particle Network to offer chain abstraction (CA), and with thirdweb to offer account abstraction (AA) services. Lumia's CA service is designed to provide DeFi users with a single-chain experience by accessing liquidity and opportunities across multiple blockchain networks. Meanwhile, AA allows users to transact across multiple platforms on a single, user-friendly interface. By leveraging smart contract–based addresses instead of the standard externally-owned account (EOA) addresses, users can seamlessly transact across platforms using a single wallet tied to these smart contracts.
By providing a unified, user-friendly interface, Lumia's AA lets Web 2.0 users enter the world of web3-based DeFi with a minimal learning curve involved. AA’s additional benefits include enhanced security at the smart contract level and gasless, Lumia-sponsored transactions.
Intent-Based Trading
Lumia users can also take advantage of intent-based trading, meaning they specify their transaction intents, and orders only execute if a matching deal is found across the entire ecosystem accessible to Lumia. Special liquidity nodes process intent-based orders and offer the best rates they can source for the user’s intent. This helps ensure that Lumia users get the best possible deals.
This advanced trading mechanism is powered by Lumia Stream, which introduces various unique advantages to enhance the user experience. For instance, it provides robust security against maximal extractable value (MEV) attacks, one of the most common exploits in the world of DeFi. It also optimizes price efficiency and minimizes the negative price impact of trades by leveraging its Resolvers to source liquidity across the entire DeFi market.
How Does Lumia Work?
Polygon CDK
Built using the Polygon CDK, Lumia is a ZK–based rollup running on a zkEVM processing engine. Based on a highly modular design, the Polygon CDK allows rollups to easily incorporate different execution, DA and settlement layers and other associated technologies. Lumia, for instance, integrates various execution engines, such as the privacy-focused Privado ID and Miden. Privado ID allows Lumia to securely and privately identify users. Based on zk technology, Privado ID enables individuals and businesses to control their personal data by sharing only the required identity information to DApps without revealing any private or financially sensitive details.
In turn, Miden is also a ZK–based platform that offers private accounts and transaction execution. Operating as a rollup network, Miden is a highly scalable environment for DeFi operators and users who value data confidentiality, an essential consideration for any finance-focused platform.
Interoperability Layers
The Lumia network also boasts high interoperability with other blockchain environments, achieved by leveraging two modular interoperability layers: AggLayer and Hyperlane.
AggLayer is Lumia's primary interoperability layer. Built into the Polygon CDK, AggLayer offers cross-chain transaction capacity across various Polygon-based Layer 2 rollup networks. It unifies liquidity across the entire ecosystem of AggLayer-connected chains, allowing Lumia to provide deep liquidity for tokenized assets.
Hyperlane, the other interoperability protocol used by Lumia, is a solution designed to help developers easily and efficiently send arbitrary data across chains. It expands Lumia's reach beyond Polygon's ecosystem. Theoretically, it may allow Lumia to access resources and liquidity across the entire ecosystem of chains that have adopted Hyperlane. As of late 2024, there are dozens of such Hyperlane-powered blockchains outside of the Polygon environment.
Tokenization Process on Lumia Chain
Lumia provides a streamlined process for RWA tokenization. As the first step, the asset owner needs to provide proof of ownership documentation and undergo any other required due diligence procedures. Following that, a Bailment Agreement is signed between the asset owner and the Lumia Foundation, the legal entity behind the project.
Within the contexts of blockchain technology and RWAs, Bailment Agreements are utilized to entrust physical assets to an authorized custodian, while the actual tokenized representations of these assets are held and used within the blockchain space.
After the parties sign a Bailment Agreement, the asset is appraised by third-party valuators and then tokenized on-chain. The tokenized version of the asset can now be used in DeFi applications accessible via Lumia for typical crypto finance operations, e.g., collateral provision, lending, borrowing, staking, yield management and more.
Lumia L2
Lumia Stream
Lumia Stream, the platform's liquidity aggregation protocol, sources liquidity from multiple exchange platforms. (This is the core service from which Lumia started its operations when it was known as Orion Protocol.) It accesses liquidity across the crypto market to provide Lumia-based RWAs with much more than tokenized on-chain representation. Besides access to liquidity, Lumia Stream features MEV protection for all trades conducted on the platform, and atomic swaps, which allow tokenized assets to be bridged across blockchain platforms.
Using Lumia Stream, developers can also implement virtual order books, which show optimal trading paths between multiple exchanges. These virtual order books can also transform pricing information from the structure used in automated market maker (AMM) pools to a format compatible with the standard order book model.
Lumia Key Features
HyperNodes
Lumia has several specialized node types, including DNLP (Delta Neutral Liquidity Provisioning) nodes and DAC (Data Availability Committee) nodes. The former are designed for decentralized liquidity provision on the network, while the latter play a key role in data validation.
There are also HyperNodes that can be used either to provide the licenses for the operation rights of virtual Lumia machines or supply the licenses used to delegate to DNLP and DAC node operators. HyperNodes can choose to run a DNLP or DAC node or delegate to these node types and earn ecosystem rewards.
Lumia first made HyperNode licenses available for purchase in July 2024. The license releases and the associated rollout of HyperNodes will be gradual.
zkProvers
The platform uses a network of zkProvers that are responsible for the generation of validity proofs — cryptographic stamps that certify the validity of transaction blocks. Currently, Lumia utilizes the default zkProver infrastructure provided by the Polygon CDK. However, the project has plans to introduce a custom prover layer in partnership with Gevulot, a provider of low-cost and highly scalable ZK validation services. Per the project's documentation, there will be further announcements on integrating a Gevolut-based zkProver system in Q1 2025.
Decentralized Sequencer Network (DCN)
Lumia's early 2025 plans also include creating a decentralized sequencer network (DCN). Sequencers are critical parts of any rollup system. These nodes organize transactions into blocks for further validation. A typical rollup network uses only one sequencer, an issue often cited as one of the key vulnerabilities of rollups.
Lumia aims to introduce a decentralized network of multiple sequencer nodes tailored to the Lumia platform to optimize its security and performance. The project plans to provide incentives in the form of LUMIA tokens to sequencer service providers in order to build its DCN.
DA Nodes
We’ve already mentioned some of the specialized node types on Lumia — DNLP, DAC and HyperNodes. Another crucial node variety on the platform is DA (lightclient) nodes. They play a pivotal role in decentralized data availability by ensuring transaction data is securely stored and easily accessible across the Lumia network. Transaction data on Lumia is distributed and stored across the network of DA nodes to provide validators with easy retrieval when data is required.
Data on the DA node network is stored in a secure, cryptographically protected format. Both the encryption and the distributed storage mode ensure confidentiality and high security for Lumia's transaction data.
DA nodes are incentivized with LUMIA tokens, based on their contributions to the network. Node operators are encouraged to actively participate, as the rewards are determined by both the amount of data processing they handle and their network uptime.
What Is the LUMIA Token?
The platform's native cryptocurrency, LUMIA, is used for a wide variety of functions:
Gas fee payments. All transaction fees on the network are paid in LUMIA tokens.
Governance. LUMIA token holders can participate in votes on changing and defining the protocol's key parameters and rules. They can also lock their tokens on the platform and be issued veLUMIA tokens, opening avenues for expanded governance participation and reward boosters.
Node staking. Token holders can also stake LUMIA in specialized network nodes to earn a share of rewards and contribute to the platform's security and operations.
Liquidity. LUMIA can be used in liquidity pools on the platform to power DeFi operations.
Discounts and exclusive access to premium services. The LUMIA token will also provide access to premium features and fee discounts.
The LUMIA token was launched in mid-October 2024, replacing the earlier ORN token, the platform's native crypto. ORN was introduced in July 2020, along with the launch of Orion Protocol. As mentioned above, the platform has announced the migration of ORN to LUMIA at a rate of 1:1. As of December 2024, ORN tokens are still in circulation, but are expected to eventually be migrated to LUMIA completely.
LUMIA is a supply-capped token, with a total and maximum supply of 238,888,888.
Where to Buy LUMIA
The LUMIA token is available in Bybit's Innovation Zone as a Perpetual contract based on USDT. Under the terms of the contract, you can trade LUMIA with up to 12.5x leverage.
Bybit's Innovation Zone offers perpetual trading users access to promising new higher-risk/higher-potential cryptocurrencies selected by the platform's professional team.
LUMIA Token Price Prediction
As of Dec 19, 2024, the LUMIA token is trading at $1.61, or 36.2% lower than its ATH of $2.49 on Dec 4, 2024, and 72.8% higher than its ATL of $0.9205 on Nov 4, 2024.
Long-term price forecasts for LUMIA are bullish. DigitalCoinPrice expects it to peak at $4.19 in 2025 and $12.06 in 2030, while CoinCodex predicts that the token will trade at $7.50 in 2025 and fall slightly to $6.53 in 2030.
Closing Thoughts
Lumia isn't your ordinary RWA-based blockchain project. While countless new platforms help users tokenize physical world assets, very few offer viable ways of further using the tokenized crypto assets within the DeFi ecosystem. Recognizing the gap, the Lumia project team has decisively taken on the task of making RWAs a highly liquid and actively used form of cryptocurrency.
The project also features a solid infrastructural backbone, supported by the Polygon CDK and its high architectural modularity. Using technologies like Miden, Privado ID, AggLayer and Hyperlane adds to the security and interoperability of the Lumia platform. At the same time, Lumia isn't done yet with sculpting its architecture into a piece of blockchain art — in 2025, the project plans to implement a decentralized sequencer network and partner with Gevolut to provide an efficient zkProver layer.
As Lumia builds up its architecture, tokenizing and trading RWAs will undoubtedly become even more efficient, convenient and secure — and decisively more DeFi-esque.
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