Research Summary
The report discusses Lumerin, a project that views hashpower as a commodity and is building a decentralized marketplace for its trade. Launched in March 2022, Lumerin has grown to a $50M market cap project with minimal advertising. The platform uses hashrate oracles to ensure the hashpower being traded is real and aims to decentralize the entire process.
Key Takeaways
Lumerin’s Unique Proposition
- Decentralized Hashpower Marketplace: Lumerin is creating a unique platform that treats hashpower as a commodity. It provides a decentralized marketplace for buying and selling hashpower, which currently lacks an effective and transparent means of trading.
- Provable Hashpower: Lumerin uses hashrate oracles to ensure the hashpower being traded is real, adding a layer of trust and transparency to the process.
Problem Lumerin Solves
- Risk Mitigation: Lumerin allows miners to hedge against market volatility and the fluctuating value of cryptocurrencies. By locking in a price for their future hashpower, miners can mitigate the risk of declining prices.
- Cost Efficiency: Selling hashpower can help miners cover operational costs, making their mining operations more sustainable. Miners in high-cost regions can buy hashpower from cheaper locations instead of mining at high costs themselves.
- Competitive Advantage: Large miners can acquire hashrate instantly, remotely, and on-chain to keep up with higher mining difficulty in real time, maintaining their competitive advantage until they can expand their physical operations.
Benefits for Sellers
- Additional Revenue Stream: Selling excess hashpower provides additional income, especially during periods when mining profitability is low. This provides miners with more predictable revenue streams, reducing their exposure to both crypto market volatility and fluctuations in mining difficulty.
- Hedging Against Bitcoin Volatility: Miners can split their revenue into two different BTC and LMR streams to mitigate Bitcoin volatility risks, while building a tokenized hashrate reserve to boost their Bitcoin mining capacity when needed.
Lumerin’s Tokenomics
- Token Supply and Distribution: Lumerin has a total supply of 1 billion tokens, with a market cap of 49.5 million. The team holds 47.6% of the tokens, VCs/Insiders hold 23.1%, the public holds 4.3%, and miners hold 25%.
Actionable Insights
- Investigate the Potential of Lumerin: Given its unique proposition of a decentralized hashpower marketplace and the problems it solves for miners, Lumerin presents an interesting case for further investigation.
- Consider the Tokenomics: Lumerin’s token distribution is heavily skewed towards the team and VCs/Insiders. This could potentially lead to a constant supply being dumped on the market, affecting the token’s price.
- Understand the Risks: As with any investment, understanding the risks associated with Lumerin, including market volatility and the project’s reliance on hashrate oracles, is crucial.
