> ## Documentation Index
> Fetch the complete documentation index at: https://docs.lumina-org.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Glossary

> Plain-language definitions of LUMINA terms.

Plain-English definitions of the terms used across the LUMINA docs. If
you're new to parametric insurance or DeFi, start here.

## Insurance terms

**Parametric insurance**
Insurance that pays out automatically when a measurable condition is met
(e.g. "BTC drops 2.5% within 1 hour"), instead of after a human reviews a
claim. No paperwork, no adjuster — the rule is fixed in advance.

**Premium**
The (small) amount you pay up front, in USDC, to buy cover. This is the
price of the policy.

**Trigger**
The event that makes a policy pay out — a price moving by the agreed
percentage within the agreed time window. When the trigger fires, a payout
(ClaimBond) is created.

**Barrier / strike**
The reference price recorded at the moment you buy the policy. The price
drop is measured against this snapshot. ("Strike" is the starting price;
the "barrier" is the level the price must cross for a payout.)

**Deductible (20%)**
The portion of the covered amount you absorb yourself. LUMINA covers 80% of
the loss, so 20% is the deductible.

**Payout (80%)**
The portion LUMINA pays when a policy triggers — 80% of the covered amount,
delivered as a ClaimBond (face value \~$800 per $1,000 of cover).

## Bonds and redemption

**ClaimBond**
The payout itself: an ERC-1155 token minted to your wallet when a policy
triggers. It represents a claim that can be redeemed for LUMINA at maturity
or sold for USDC sooner.

**Maturity (730d)**
The date a ClaimBond can be redeemed for LUMINA — 730 days (about two
years) after it is minted.

**Epoch**
A fixed time window the protocol uses for accounting (e.g. weekly redemption
limits). Bonds and throttles are bucketed by epoch.

**Redeem**
Exchanging a matured ClaimBond for LUMINA tokens via the BondVault, at the
protocol's reference LUMINA/USD price.

**Throttle / queue**
A cap on how much can be redeemed per epoch (about 1.08% per week) to
prevent a "bank run" on the vault. Redemptions above the cap are placed in
a first-in, first-out (FIFO) queue and paid in a later epoch.

## Token and protocol mechanics

**Burn**
Permanently removing LUMINA from circulation. 85% of every protocol fee is
used to buy LUMINA and burn it, making the token deflationary.

**Shield**
One parametric insurance product — a single rule like "BTC drops 2.5% in
1 hour." LUMINA has several shields, one per covered condition.

**Adapter**
A thin proxy contract (`FlashShieldAdapter`) that connects the
`PolicyManager` to a shield. One adapter sits in front of each product.

**Sandbox**
A free, no-wallet way to try a policy purchase end-to-end. The relayer
funds everything; trials are capped (e.g. \$100 per trial) so you can test
without spending real funds.