Lukso, also known by the market ticker LYX, is a blockchain project that aims to connect the digital with the physical and provide you with one identity across the blockchain.
At its core, Lukso looks to build strongly relational communities through identification, virtualization and tokenization.
Lukso can be considered as a way to prove ownership of an item, that is either physical or digital, and is a way for creatives to ensure access to their works into the future.
What is Lukso?
Lukso released its whitepaper in early 2020 and lists Marjorie Hernandez, Fabian Vogelsteller, and Steffen Sieler as its authors. The Lukso blockchain itself went live in May 2023.
Of the three, Marjorie Hernandez and Fabian Vogelsteller are still listed on the Lukso website.
Of the two remaining, most notably is Fabian Vogelsteller who previously worked at Ethereum between 2015 and 2018.
There Fabian helped create the official Ethereum wallet, proposed the ERC-20 standard, and released the first decentralized web3 browser.
The founders believe by establishing digital identities for physical products, the creators can enable their digital ownership and continuously gather their unique and singular data history while having lasting and direct access to their owners.
Though, this brings us to the question, how does Lukso work?
How does Lukso work?
Lukso is a layer-1, EVM-compatible blockchain and former ERC-20 token.
Layer-1 refers to the base layer of a blockchain network, such as Bitcoin or Ethereum.
A layer-1 serves as the foundation for all additional layers and applications built on top of them.
A good example of a layer-2 would be Optimism on the Ethereum network. Ethereum is the layer-1 platform, and Optimism is a layer-2 blockchain.
The difference between the two is that Optimism exists to serve a specific purpose on the layer-1 blockchain.
In this example, Ethereum is where all the transactions occur as it is the layer-1 blockchain.
While Optimism is a layer-2 application that helps Ethereum process their transactions which helps improve the transaction speed and keep the gas fees low.
Next, we have EVM-compatible, referring to the Ethereum Virtual Machine which is a decentralized computing environment within the Ethereum blockchain network.
It executes the smart contracts that allows the decentralized applications to function autonomously and without human oversight on the Ethereum blockchain.
Though, just because something is EVM-compatible does not mean it is directly related to Ethereum.
Such as with Lukso which has now launched their own blockchain, but the “compatible” part of EVM-compatible refers to all the tools and tutorials for building on the Ethereum network will also be compatible with Lukso.
Meaning if you know how to build apps on Ethereum, you can use those same skills to build apps on Lukso.
It also means future interoperability with other networks is also possible, if not likely, given the recent trend towards interoperable platforms within the larger blockchain space.
Lastly, we have ERC-20, which is a token standardization blueprint to ensure compatibility with the Ethereum network.
This is how Lukso started life, as an ERC-20 token on the Ethereum network, but as of May 2023 has migrated to its own layer-1 platform, and the old LYXE ERC-20 tokens were converted into LYX tokens on the newly launched blockchain.
Consequently, this means Lukso is a Proof-of-Stake based network, something they have kept post-migration to their new blockchain.
Very briefly put, Proof-of-Stake is the cousin to the more famous Proof-of-Work, as used by Bitcoin.
The main difference between the two is that Proof-of-Stake randomly selects a validator and a few verifiers to confirm their incoming transactions rather than making the entire network compete to solve a complex algorithmic puzzle.
The validator and verifiers are selected based on how much they have deposited to the network and are rewarded for verifying transactions.
The main benefits of this are scalability, speed, and reduced energy consumption when compared to Proof-of-Work.
What makes Lukso unique?
Probably the most unique feature of Lukso is their Universal Profiles, which are interoperable blockchain-based profiles that enable verifiable identities in the digital world.
Universal Profiles allow for universal logins that make remembering usernames and passwords a thing of the past while still giving you full control of your virtual assets and digital identity.
This means one account across the whole network. Once you’re signed in on the blockchain, you are signed in for every app on the platform.
Due to being EVM-compatible, this also means it is cross-compatible with many other blockchains, such as Ethereum and Avalanche, giving the potential for Universal Profiles, to be more widely adopted by the wider blockchain community.
In short, Universal Profiles aims to simplify the onboarding process to Web3 for users, brands, and creators while also supposedly improving accessibility, security and functionality when compared to its competitors.
But how about the Tokenomics?
LYX Tokenomics
LYX launched with a maximum supply of 42 million tokens.
The initial distribution of those tokens was broken down as follows: 37% is part of the circulating supply.
A further 27% was given to the foundation, which deals with the maintenance of the network, and the final 36% is part of the “incoming supply”.
The “incoming supply” means the release of new tokens, which release as the vesting period on these tokens end.
This supply includes 5% from the Foundation, 1% from initial grants, 3% from advisors, and 28% from the various private and seed sales.
At present, the only blockchain explorer for Lukso does not show the wallet distribution, so out of the 3,000 unique wallet addresses, it is impossible to tell if any whales are holding an alarming amount of LYX tokens.
In conclusion, Lukso looks to change how we interact with blockchain technology.
It hopes to offer a way to incentivize creators to sell through its platform, and it offers a one-click convenience for those who hate remembering usernames and passwords across multiple apps and networks.
Being so new, the future of Lukso is certainly not guaranteed, however, if blockchain technology is to become mainstream, it will need to become more convenient for the average user.
This will require companies, perhaps like Lukso, to help simplify the process.