Core Capabilities

1. Introduction

Lucia Protocol is a cutting-edge, decentralized data attribution and identity verification platform that leverages blockchain technology to provide secure, privacy-preserving services across both Web2 and Web3 ecosystems. Central to its ecosystem is the LUCX token, which incentivizes active participation, facilitates governance, and serves as the foundation for profit redistribution. This comprehensive tokenomics document details the mechanisms and incentive structures that drive the value of the LUCX token and ensure the long-term success of the Lucia Protocol.

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2. Browser Extension

The Lucia Protocol Browser Extension is a key component of our platform, providing users with a seamless and privacy-preserving way to connect their Web2 and Web3 identities. This extension plays a crucial role in enabling self-attribution and data sharing, empowering users to earn rewards while giving businesses access to valuable, segmented market data.

2.1 Key Features

• Self-Attribution Feature: Lucia Protocol empowers users to self-attribute their data and interactions. By using a dedicated browser extension, Passport Holders can connect to a Lucia Blockchain Node and send metadata that enhances advertisers’ market segmentation analysis.

• Browser Extension Functionality: The extension provides users with a client interface that links their activities to the Lucia Node. It collects and anonymizes metadata related to user behavior and interactions, which advertisers can use to understand consumer segments better. This metadata remains secure and privacy-preserving, thanks to the integration of ZK-proofs.

• Earning Potential in Stablecoins: By participating in self-attribution and sharing their metadata with advertisers, Passport Holders can earn between $2.15 to $3.58 per day in stablecoins. This provides a direct and tangible incentive for users to engage with the protocol and share their data responsibly.

  • Lucia Protocol’s attribution business collects fees based off of total impressions, how many conversions we help each of our enterprise customer obtain made possible with our software.

  • Mainstream/consumers can accumulate actions on our platform to build up their passport

  • Measure loyalty - frequent logins means more credit for in-game purchases, increased airdrop rewards

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3. Core Attribution Business Model

End users benefit from Lucia Protocol’s advanced attribution services in several ways:

• Automatic Identity Creation: Users may discover that their digital identities have already been established within the Lucia Protocol ecosystem. This includes a comprehensive record of both their Web2 and Web3 activities, automatically captured and integrated.

• Data Processing and Security: The SDK feeds their data into a ML processing pipeline. On-chain data is secured using Multi-Party Computation (MPC) techniques, ensuring that sensitive information remains protected. Meanwhile, off-chain data can be validated and made available using ZKPs to maintain privacy.

• Connecting Contact Information: Users are incentivized to link their email addresses and other contact details to their on-chain passports. This enables Web3 startups focused on growth to reach users directly, track their engagement, and facilitate a smoother onboarding experience.

• Gateway to Web3 Adoption: Lucia Protocol positions itself as a crucial entry point for large numbers of new users into the Web3 ecosystem, leveraging a strategic first-mover advantage in emerging markets. By partnering with Layer 1 blockchains, exchanges, wallets, and other key ecosystem players, Lucia Protocol can accelerate the adoption of decentralized technologies and strengthen its network.

In regions where crypto is viewed as a hedge against the volatility of local fiat currencies, Lucia Protocol offers unique opportunities for financial empowerment. Users can participate in activities such as airdrops and earning rewards on GameFi platforms without requiring any upfront capital investment, making it an attractive and accessible solution for those seeking financial stability through Web3 engagement.

4. Use Cases

4.1. Retaining Users in GameFi

• Scenario: GameFi companies integrate Lucia Protocol to enhance user engagement. By offering a branded credit card, these gaming companies create an in-game ecosystem where players are rewarded for daily activity. Players who make frequent in-game buy or sell decisions receive higher rewards than those who only log in occasionally. This strategy maximizes user retention and engagement.

• Outcome: Young adults who excel in the game can generate a substantial income, simultaneously building their credit scores and financial literacy.

4.2. E-commerce Ventures

• Scenario: An entrepreneur has factory connections in Vietnam to manufacture shoes and has validated market demand in the U.S. through a small, successful paid ad campaign. However, the entrepreneur requires initial capital to meet large minimum order quotas set by suppliers.

• Solution: By using Lucia Protocol, the entrepreneur can leverage decentralized financial solutions to obtain funding, streamline their supply chain, and efficiently manage cross-border commerce.

4.3. Interest Rate Arbitrage

• Scenario: A Japanese homeowner mortgages their home at a 2% interest rate, gaining over $200,000 (¥30,967,100) in liquidity. They convert JPY into Bitcoin or Ether and use this capital to invest in lending pools that offer significantly higher returns.

• Outcome: By lending to creditworthy borrowers in regions with medium to high capital costs, the homeowner earns between 26% to 43% APY, depending on the interest rate differential (26% = 28% - 2%, 43% = 45% - 2%). This strategy also provides long-term exposure to potential capital gains from BTC or ETH price appreciation.

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5. Ad Campaign Discounts for LCI Stakers

To encourage businesses to use Lucia Protocol for ad attribution, the platform offers Ad Campaign Discounts to LCI stakers.

Tiered Discount Structure

• Discounts: Companies receive up to 40% off per-conversion charges or API fees by staking LCI tokens.

• Cross-Chain Passport Integration: Businesses using the Lucia Cross-Chain Passport benefit from conversion charge discounts across multiple blockchains, enhancing the value of staking.

$$\text{Discount} = \text{Base Fee} \times (1 - \text{Discount Rate})$$

• Where the Discount Rate is determined by the staking tier.

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6. Tokenized Data Monetization and User Incentives

Lucia Protocol allows users to monetize their data while maintaining privacy.

User-Controlled Data Sharing

Users decide what data to share, and rewards are proportional to the value of the data shared.

$$\text{User Reward} = \text{Data Value Coefficient} \times \text{Engagement Level}$$

• Identity Connection Incentives: Connecting more social and Web3 identities enhances the user's digital profile, increasing their earning potential.

• Gamified Data Sharing: Users earn rewards for frequent logins and data contributions, making participation engaging and rewarding.

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8.6. Incentives for Token Holders

Several mechanisms are designed to increase the desirability of holding LCI tokens.

Profit Distribution in Stablecoins

Companies using the protocol generate profits in stablecoins like USDT, which are distributed to stakers. The formula for monthly stablecoin rewards is:

$$\text{Stablecoin Reward} = \frac{\text{Total Monthly Profit} \times \text{Allocation Percentage}}{\text{Total LCI Staked}}$$

• Extraction Fee: Claiming rewards incurs a fee in LCI tokens, which are burned to reduce supply, driving token appreciation.

Revenue Growth Projections

With projected revenues of $10.7 billion, the governance committee allocates 10% to 15% of profits for redistribution, enhancing token value over time.

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8.7 Adaptive Transaction Fees Based on Network Demand

Lucia Protocol introduces Adaptive Transaction Fees to maintain network efficiency.

$$\text{Dynamic Fee} = \text{Base Fee} \times \left(1 + \frac{\text{Network Activity Level}}{\text{Baseline Activity}}\right)$$

• High-Activity Periods: Increased fees are redistributed to stakers.

• Low-Activity Periods: Reduced fees encourage ongoing platform use.

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8.9. Omnichain Utility and LayerZero Integration

The protocol’s Omnichain Fungible Token (OFT) feature, powered by LayerZero, ensures cross-chain utility.

Cross-Chain Payment Functionality

LCI can be used across Ethereum, Binance Smart Chain, and other networks, simplifying transactions for businesses and enhancing token utility.

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8.10. Sybil Protection

Lucia Protocol employs advanced mechanisms to prevent fraud.

Sybil-Resistant Algorithms

$$\text{Sybil Protection Score} = f(\text{Number of Linked Identities, Network Verification})$$

• Fraud Detection Services: Businesses pay in LCI for access to Sybil-resistant data, with fees redistributed to stakers.

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Resources:

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