Last month, Lumoz announced the completion of a new round of strategic financing, with the participation of well-known traditional Mega Fund IDG and other capital, and it has only been about a month since the completion of the Pre-A round of financing. Earlier, Lumoz revealed that it would conduct node sales in the near future. At present, sales have reached nearly half, and the market response has been good. In the past few months, many high-quality projects have also launched node sales. So, why do many project parties with complete technical backgrounds have a soft spot for node sales recently?

Node Sales Gaining Traction and Competition War is Imminent

Node sales, a new token issuance model that can benefit many parties, is favored by many projects and investors because of its flexibility, and has gradually become one of the popular financing methods on the market. For any decentralized network, a large number of nodes are needed to support it. Therefore, projects can set a certain proportion of node token rewards (Node Rewards) in their Tokenmetric for node sales, and investors obtain node token rewards by purchasing node mining.

Then, how to understand node sales? To grasp the concept of node sales, let’s consider the primary and secondary markets. The primary market serves as the primary channel for project financing, often excluding ordinary investors from participating in early-stage funding rounds. While the secondary market offers unrestricted access, the valuations of projects are typically higher, demanding a keen eye for investment and strong analytical skills from investors. Node sales can be viewed as an intermediary step between the primary and secondary markets, offering a unique “1.5 market” dynamic. For project teams, node sales provide a more flexible fundraising approach compared to traditional primary market offerings. For retail investors, node sales present an opportunity to participate in early-stage investments at lower valuations, potentially leading to higher returns.

The factors influencing node sales are similar to those of conventional token sales. Therefore, when evaluating whether to participate in a project’s node sale, one should consider not only the fundamental research of the project itself but also 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 ecosystem incentives, marketing, and most importantly—the release of the team and investment institution shares.

Data-Driven Insights: A Reference on Lumoz

Let’s compare the current leading node sale projects in the market: Lumoz, Aethir, CARV, and Sophon, focusing primarily on their expected returns to understand how Lumoz stands out in the ongoing node sale competition.。

Project Overview

• Lumoz: Focuses on building and innovating modular computing layer & ZK-RaaS platform. Aims to simplify and enhance the usability of ZK-Rollup to promote large-scale deployment of zkEVM-based application chains. Developers can easily deploy their ZK-Rollup (zkEVM) on multiple chains. For miners, Lumoz is a multi-chain PoW protocol that supports mining on various public chains and generating zero-knowledge proofs for ZK-Rollups. The innovative modular computing layer can be used to efficiently accommodate idle computing power in the market, thereby providing modular computing support for ZK-Rollups.
• Aethir: A scalable decentralized cloud infrastructure (Decentralized Cloud Infra), building a GPU-based distributed computing infrastructure to break down hardware barriers and empower AI and gaming.
• Sophon: A modular blockchain focused on the entertainment track based on zkSync. As a zkSync superchain utilizing ZK Stack, Sophon is designed to be customized 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 domains. With the CARV protocol, everyone can now own, control, verify, and monetize their data, ensuring that privacy, ownership, and control remain firmly in the hands of individuals.

Basic Data Comparison

As can be seen from the node sales data panel above, among the four major projects, Lumoz and CARV are particularly generous in terms of node token allocation, both allocating 25% for node sales, while Aethir and Sophon’s node token allocations are only 15% and 20%, respectively. The part that has the most significant impact on the stability of the price during the token release process is the release of the team and venture capital holdings during the project’s initial financing.

In terms of token release rules, Lumoz’s node tokens are released linearly over 36 months, while the holdings of investors in both rounds of financing have a 6-month lock-up period and are released over 36 months; the team’s share has a 12-month lock-up period and is released over 48 months. CARV’s investor holdings begin to unlock after a 6-month lockup, while the team’s holdings begin to unlock after a 9-month lockup. Since the redemption period for node tokens is 5 months, node tokens will start circulating earlier than investor holdings.

Aethir’s team and investor holdings both have a 12-month lockup period. However, due to the synchronous release of 35% of the total GPU tokens and node tokens, the twice the number of node tokens could lead to unavoidable inflationary pressure. In contrast, Lumoz and CARV, which have a more generous node token allocation and more friendly release rules, may face lower inflation rates during the token unlocking process.

Expected Rate of Return and Payback Period Analysis

Lumoz’s Sales Plan

• Node Token Reward Allocation: 25% of the total MOZ node tokens will be allocated as rewards for mining through purchasing Lumoz zkVerifier nodes.
• Method of Sales:
  • ETH payment, supporting the Arbitrum network
  • BTC payment, supporting the Merlin Chain
  • BNB/BTCB payment, supporting the BSC network
  • USDT/USDC/ZKF (enjoy a 10% discount) payment, supporting Arbitrum, BSC, and ZKFair Network
• Lumoz Node Sale Referral Mechanism: Node buyers can receive a discount by entering a referral code at the time of purchase. The discount will not take effect immediately but will be refunded to the node buyer in the future. Additionally, referrers can earn up to 10% commission.
• Refund Mechanism: Six months after Lumoz’s TGE, the refund window will open, and users can choose to return all produced tokens and NFTs and receive an unconditional refund of 80% of the payment amount.

Analysis of Expected Returns and Payback Period for MOZ Token Holders

The above outlines the specific plan for Lumoz node sales. There’s a cap of 100,000 nodes, divided into 10 tiers. As we can see, the price of the zkVerifier nodes increases with each round, from 200 USD in the first round to 704 USD in the last round, an increase of approximately 2.5 times. If all 100,000 nodes are sold, Lumoz will raise 40 million USD through node sales. For zkVerifier node purchasers, the total expected return from mining includes a share of 40 million Lumoz Points (prior to TGE), 25% of Lumoz tokens (after TGE), and a potential airdrop from the Lumoz ecosystem’s upcoming Layer chains.

Being the most crucial part of the return composition, we will only take the MOZ node token rewards to estimate the expected returns for participating in Lumoz node sales. At present, Lumoz has completed three financing rounds, and in the third round of financing, Lumoz was valued at 300 million USD. Typically, the project’s market value can reach 10 times the valuation of the previous round during TGE. For Lumoz, that would be 3 billion USD, with the total value of 25% of MOZ tokens being 750 million USD. However, considering market sentiment, the uncertainty of market fluctuations, and the impact of other uncontrollable factors, we conservatively estimate that with a market value of 1 billion USD, the total value of 25% of MOZ tokens would be 250 million USD.

Upon further analysis of cost, we can see that from tier 1 to tier 10, the price of each node sale increases by 15% per round. If you participate in buying at tier 1, the cost per node is $200; tier 3 costs $265; tier 6 costs $402; and ultimately, tier 10 costs $704. We’ve only shown the number of node tokens unlocked for the first 12 months here, but the total unlocking period is 36 months.

Total supply of MOZ tokens is 10 billion

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

After the node sale is completed, the actual node mining revenue depends on the number of nodes online at the same time and the online time. As shown in the figure above, when there are 10,000 nodes online at the same time, each node can receive 6,944 token rewards in the first month, and when 50,000 nodes are online at the same time, the mining reward in the first month is reduced to 1,388 tokens. In other words, the more nodes there are online at the same time, the fewer token rewards each node can receive.

The total period of release of all node rewards is 36 months

Next, we can further estimate the profitability of node mining. The table shows the expected monthly income from participating in node mining in the first year based on a valuation of 1 billion. Assume that lucky Little A successfully participates in the purchase of tier 1, and his cost is 200U, then the green square in the picture above is the time for him to recover his capital. When the number of nodes online is 10,000, Little A’s profit rate reaches 300%+ in just one month, and can reach 10 times the profit ($2083) in the third month. The cost for Little B who participated in the tier 6 node sales to purchase the zkVerifier node is 402U, so Little B will also make back the money in the first month and gain more than 150% of the income. At the same time, within half a year, Little B can also obtain more than 10 times the income ($4167) through node mining.

Compared to other projects, XAI, which started this round of node sale frenzy, has a payback period of about 4 months. And CARV, which is most similar to Lumoz, although the value of the node tokens released in the first month is enough for tier 1 users to break even, since the released veCARV tokens need to be redeemed into CARV to trade, if you want to redeem 1:1, you need to wait for a redemption period of 150 days, so the payback period also needs to be at least 4-5 months.

In terms of airdrop rewards, purchasers of zkVerifier nodes also have the opportunity to receive airdrop rewards from the new chains supported by Lumoz, ecosystem partners (such as Merlin Chain, ZKFair), and invested parties. It’s worth mentioning that due to the sale caused by token unlocking, the prices of MERL and ZKF tokens are almost at the bottom. As the selling pressure decreases and market sentiment reverses, for Merlin and ZKFair, these two high-quality projects with both technology, background, and narrative, the expected airdrop rewards make people look forward to Lumoz’s node sale even more.

To Make It in This World, One Needs Strength and Connections

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 computational services for cutting-edge technologies such as Artificial Intelligence (AI). In response to the current high computational cost challenges in the Zero Knowledge computation domain, Lumoz leverages its deep professional expertise in ZKP, acquired over many years, to innovatively optimize circuits and algorithms, significantly enhancing computational efficiency. This effectively addresses the high cost and low efficiency problems faced by Rollup project parties, reducing the threshold for ordinary users to participate in the Zero Knowledge computation market. On the other hand, Lumoz has also simultaneously launched a modular computational power layer to undertake surplus computational power in the market, thereby providing computational support for its ZK-rollups.

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

The most popular narratives, unique core technology, and strong R&D capabilities have also made Lumoz a favorite in the capital market. In April, Lumoz just completed a 120 million USD Series A financing round led by Polychain. Other investors include not only top-tier Crypto Native institutions like OKX Venture, but also traditional dollar funds such as GGV and IDG Capital that have been active in the crypto market in recent years. Following this, at the end of May, Lumoz announced the completion of a strategic financing round with a valuation of 300 million USD. The specific amount was not disclosed, and the lead investors were IDG Blockchain, Gate Ventures, Blockchain Coinvestors, and Xiayan Capital. The strong financing background undoubtedly adds a competitive edge to Lumoz in the node sale wars.

Summary

Summer is coming, and we’ve survived a “long” two-month bear market. Currently, with the approval of the ETH ETF and Trump’s strong call for cryptocurrency, the market’s expectations and consensus that the bull market is about to return are expected to reach a climax again. Based on experience, the market generally expects that the real climax of this bull market has not yet arrived, or at least will reach the high point in March again. Driven by this optimistic mood, how can Lumoz, which has both topic, strength and background, not make people full of expectations?

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