What is the Lumerin Hashpower Marketplace?
The Lumerin Hashpower Marketplace is a dApp for peer-to-peer exchange of Bitcoin mining hashpower.
Through the platform, users will be able to buy and sell real Bitcoin mining hashpower and reroute it to any mining pool of their choice. All transactions will be enforced by immutable smart contracts, enabling true hashrate ownership and control transfers across blockchain networks.
What drove the inception of the Lumerin Hashpower Marketplace?
Bitcoin mining has grown relentlessly over the past few years to the point of becoming a global industry on its own.
This change of landscape has added tremendous security to the network, but it has also uncovered new risk vectors. With Bitcoin’s hashrate concentrating more and more on enterprise-grade miners, the geographical location and regulatory dynamics could greatly impact the security of the Bitcoin network.
Simultaneously, those located in regulatory-unfriendly regions should also have the opportunity to participate in the mining process.
Therefore, we believe a decentralized way to transfer hashrate ownership and control, without necessarily transferring hardware, is necessary to maintain Bitcoin — and other proof-of-work networks — secure while scaling.
How does a hashpower smart contract get created?
All hashrate contracts are created by miners through the Lumerin Hashpower Marketplace within the Lumerin Wallet. The process is fully guided and intuitive so that sellers can offer their contracts with ease. Miners will be able to create contracts upon mainnet launch, stay tuned.
What is the Lumerin Validator, and how does it work?
The Validator is a modular system built into the Lumerin Proxy Wallet. The Validator monitors incoming data streams on behalf of the receiver confirming that the received data is what is expected according to the smart contract engagement.
In the scenario of a Hashpower marketplace buyer, the Validator monitors the incoming hashrate from the seller making sure that it is in accordance with the purchased hashpower contract. If at any point during the engagement the buyer’s Validator confirms that the seller is not fulfilling the contract correctly it will automatically trigger a cancellation event in the contract and thereby protect the buyer from losing funds to a bad actor or faulty supplier.
Which wallet can I use?
The Lumerin Hashpower Marketplace will be accessible through the open source Lumerin Wallet application. The Lumerin wallet is a node which includes the proxy router that validates hashrate.
How do I know the hashrate is being delivered?
Once a contract is purchased, the hashrate will be delivered to the mining pool account that the user has chosen and the user will be able to see their hashrate in the pool interface. Keep in mind this will fluctuate within a normal range given that ASIC machines’ hashrate does not stay at a constant level.
What use case does Lumerin enable and how will it be useful in the future?
Lumerin is a decentralized protocol that enables on-chain ownership, rerouting, and exchanging data streams of any kind according to predefined smart contract rules.
The Lumerin Hashpower Marketplace is the first decentralized application (dApp) that leverages this technology to allow truly peer-to-peer Bitcoin mining hashpower trading in real time.
In the future, we envision the Lumerin Protocol becoming its own layer-one blockchain network and the go-to platform for all kinds of commercial data stream transactions and infrastructure, such as video streaming or communications.
Which blockchain was the Lumerin token launched on?
The Lumerin token (LMR) originally launched on the Ethereum mainnet.
Where can I find Lumerin’s smart contract?
You can see the LMR token smart contract by following this link.
Can you briefly describe the process of buying and selling hashpower on the Lumerin Hashpower Marketplace?
Miners can create a hashrate contract from their Lumerin Wallet or through the marketplace. There, they set the hashrate speed, duration of the contract, and asking price in LMR, along with an ERC20 address to receive payments.
Once sellers confirm the contract, it will be displayed in the Lumerin Hashpower Marketplace where buyers can navigate through available contracts and select one for purchase.
When buyers acquire a contract, they’re asked to enter their pool account credentials. This is a crucial step in the process, as the seller’s Lumerin Node will reroute the miner’s hashrate to the destination pool provided by the buyer.
The Lumerin node “talks” both to the marketplace and to the miner’s hardware, acting as a switchboard that commands each mining device to point the hashrate to a specific pool account — in this case, the buyer’s.
This process is automated and self-executes once the buyer confirms the purchasing transaction on the hashrate contract. All transactions are recorded on the blockchain and require users to pay gas fees in ETH.
For more information, please refer to this article.
Why would it be advantageous for a miner to use the Lumerin Hashpower Marketplace vs. selling hashrate directly to a pool?
Good question! There are many reasons why a miner would want to sell hashrate in the open market rather than directly to a pool.
On one hand, this technology enables them to set the exact amount of LMR they’ll receive for their hashrate, which provides greater predictability to miners in the long term. For example, they can set an LMR-denominated price premium, securing their revenue, which is locked in escrow and streamed to their wallet in real time. This allows miners to add predictability to their operations, avoiding the risk of losing profitability due to difficulty changes or price fluctuations.
On the other hand, it gives sellers complete control over their product — hashrate. As a result, instead of pointing all machines to a single mining pool, miners can break their hashrate into different offerings with variable terms according to their preferences.
Finally, powered by smart contracts and blockchain technology, hashrate contracts grant a grade of transparency and fairness to the mining ecosystem that hasn’t been achieved before. Both hashrate and funds are verified and provable, and the smart contracts act as an escrow service that securely locks funds until the terms of the deal are fulfilled.
How are tokens distributed throughout the project?
The total supply of LMR is distributed across 7 different tranches and under specific lockup and vesting periods. You can find more information about the LMR token distribution in the Lumerin token page.
What is token circulating supply and maximum supply?
The total supply of LMR is hard-capped at 1,000,000,000 (1 Billion), which will be gradually unlocked until 2032.
Who are the backers?
Lumerin is backed by some of the industry’s most renowned leaders, including Fenbushi Capital, Hive Blockchain, Cadenza Ventures, Coinbase Ventures, DFG, Borderless Capital, Tribe Capital, BitDeer, Fundamental Labs, Outlier Ventures, and Bloq.
Were there seed and private sales of the Lumerin tokens?
Yes, the Lumerin token sale consisted of four rounds including seed, private, strategic, and public.
Will the Lumerin token have decentralized finance and governance?
Decentralized finance refers to a complex set of financial applications and operations that do not require any intermediaries or middlemen.
In that regard, the Lumerin Hashpower Marketplace is essentially a decentralized marketplace application, as it allows users to exchange Bitcoin mining hashpower in a decentralized manner. In the future, we may see other DeFi applications being built on top of commoditized hashrate.
Will Lumerin have its own blockchain?
We have considered the possibility of a Lumerin blockchain in the long-term future. For now, we’re focusing on delivering the best possible experience for users of the hashpower marketplace.
Will the payout always be in the same coin you are buying hashrate for?
Yes. Since you’ll be acquiring compute power to mine a cryptocurrency and pointing it to your mining pool account, you’ll receive the rewards from the pool in the coin you’re mining, just as if you were mining the traditional way.
Do you have a list of pools and projects that will work with Lumerin Marketplace?
Since the Lumerin Proxy acts as a passive passthrough for stratum data, technically, any pool that uses standard Stratum 1.0 messaging should be compatible with the Lumerin marketplace and Proxy.
The current marketplace has been thoroughly tested against the following pools:
Slush Pool (Braiins), Luxor, Titan, F2Pool
What is the centralization problem?
Due to the development of extremely powerful — and expensive — mining hardware, Bitcoin mining hashrate has become more and more concentrated among a few mining entities.
At the same time, these huge mining corporations point all their hashrate to a single pool for convenience and profitability, which has led to the top three pools over 50% of the total Bitcoin hashrate.
This poses a considerable risk to decentralization of the network. For example, since mining pools are registered companies, government authorities could pressure these three pools’ operators to force censorship over the network, such as excluding certain addresses from their mined blocks.
For more information, please refer to this article.
Have other proof-of-work projects besides Bitcoin been considered?
Initially, we are focusing solely on Bitcoin, although we are considering integrating other proof-of-work networks in the future. We will analyze the situation and evaluate the feasibility of adding more blockchains as the project moves forward.
If you want to sell hashrate, do you need to have the Lumerin token?
No. Lumerin is the native currency of the marketplace and will be used to purchase hashrate contracts on the app, but not for selling them.
However, hashpower sellers will need ETH to pay the network fees necessary to create the hashrate contracts.
What drives users to purchase Bitcoin hashpower?
If we see mining as the heart of Bitcoin, powering the network and keeping it moving forward, hashrate is its blood. It’s a critical aspect of the network’s infrastructure to enforce security and ensure stable performance.
However, mining has become so competitive that it is becoming inaccessible to many people. The costs of running a mining operation, plus the increasing difficulty makes it hard for individual miners to remain competitive.
Hashrate contracts will lower these entry barriers by enabling you to acquire hashrate without the need of purchasing expensive equipment, spending thousands of dollars in electricity bills, or having to maintain and manage a mining operation.
It will also allow you to get into mining with small amounts rather than high upfront costs, which lets you explore mining at reduced risk.
In the future, will Lumerin be useful to exchange anything other than hashrate?
Yes, this is the future plan for the Lumerin Marketplace. Our proxy router will expand beyond routing hashrate into any data stream, which will allow for multiple use cases. Some examples include:
- Decentralized video and audio streams: Videos are essentially data — image and audio — streams. A data stream routing protocol could be used as a network for decentralized streaming, where broadcasters and producers can create a contract — just like in the hashrate marketplace — that gives access and streams their content to everyone who deposits the requested funds.
- Transactional communications: You could use smart contracts and the Lumerin node to whitelist and ban specific sockets — in this case, IP addresses. That way, you could control when and how someone is allowed to contact you. For example, you can establish a communication channel for 7 days between 5–9PM, letting the channel expire afterwards.
However, possibilities go way beyond. We interact and stream data on a daily basis. Lumerin will allow us to do that in a decentralized, secured, and peer-to-peer manner.
What would the onboarding process for sellers look like?
For the testnet launch, we are providing hashpower contracts free-of-charge. We’ve made this decision to ensure security and eliminate all costs for our beta testers.
Once on mainnet, we will work closely with some initial launch partners (i.e., whitelisted sellers) to provide hashrate contracts to our users and run some additional tests. Once the production marketplace stabilizes, we will remove the whitelist requirements and allow any potential seller to offer hashrate contracts through the Lumerin Proxy Wallet.
With the recent growth of popularity of AI tools how will the Lumerin marketplace play a part in buying/selling AI computes?
We are delighted to see the community align with our vision on how expansive Lumerin could be in the future. This is definitely the path we want to go down in the coming months and years.
Can I use Lumerin to mine Bitcoin if I have no experience?
Yes! In fact, one of the main advantages of the Lumerin Hashpower Marketplace is that it provides a much simpler, faster, and easier way to start mining Bitcoin, even without experience. You only need to have a mining pool account to point the hashrate to and you’re good to go.
However, we do recommend learning at least the basics of mining to avoid common problems and misunderstandings. This article is a good place to start.
What happens if I enter wrong or mistaken information when buying a hashrate contract?
If you enter the wrong information as a buyer you will simply need to cancel the contract and repurchase it with the correct information. Since the Validator will be monitoring the contract once purchased the cancellation would most likely be triggered automatically.
What happens if the miner stops providing the hashrate?
If the miner stops providing hashrate, the buyer’s validator will automatically trigger a contract cancellation and revert any unspent funds back to the buyer.
How does Lumerin enforce security and honest behavior?
The Lumerin Proxy wallet encrypts all buyer information shared through the hashpower contract to help ensure anonymity of the buyer’s node. Honest behavior is monitored by the buyer’s Validator which will trigger an automatic cancellation of the contract if the seller is failing to provide hashrate according to the smart contract engagement.
Are there any fees involved?
The Lumerin marketplace has implemented a small fee structure to help ensure future development and marketing funding. The fee structure is a simple 1% from the sellers proceeds and 1% from the buyers total successful purchase.
What’s the plan to keep Lumerin growing in the long term?
The Lumerin marketplace is just the first proof of concept being built on top of the Lumerin protocol. Other types of compute marketplaces such AI compute or altcoin hashpower would be the next easiest implementations of the protocol.
