> ## 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.

# Tokenomics

> LUMINA supply, allocation, vesting, fee burn.

This page consolidates the LUMINA token's supply mechanics. For the
contract-level deep-dive, see [/concepts/lumina-token](/concepts/lumina-token).

## Supply

LUMINA is the protocol's native ERC-20 with a **fixed 100,000,000 (100M)
hard cap** — no further minting. The deflationary mechanism is the
[auto-burn](#auto-burn), so circulating supply only *decreases* over time
as protocol usage grows.

## Genesis allocation

The full 100M supply is minted once at genesis and split across five
buckets:

| Bucket                | Amount          | Share    | Purpose / Vesting                                   |
| --------------------- | --------------- | -------- | --------------------------------------------------- |
| **BondVault**         | 70,000,000      | **70%**  | Backs ClaimBond redemptions (the payout reserve)    |
| **CEX-DEX liquidity** | 14,000,000      | **14%**  | Centralized + decentralized market-making liquidity |
| **Founder**           | 8,000,000       | **8%**   | Team alignment, locked in `FounderVestingV2`        |
| **LBP**               | 5,000,000       | **5%**   | Liquidity Bootstrapping Pool                        |
| **Treasury**          | 3,000,000       | **3%**   | Operations & grants, multisig-controlled            |
| **Total**             | **100,000,000** | **100%** | Fixed supply                                        |

Verify against the on-chain `LuminaToken.totalSupply()` and the
`FounderVestingV2` contract.

## Fee split (85 / 8 / 2 / 5)

Every protocol fee stream — policy premiums **and** the marketplace fee —
flows through `AdaptiveFeeDistributor`, which splits each fee into:

| Slice   | Destination                                        |
| ------- | -------------------------------------------------- |
| **85%** | Burn (USDC → LUMINA via `TWAPBurner`, then burned) |
| **8%**  | Buyback (`BuybackEngine`)                          |
| **2%**  | Ops (gas reimbursements, infra)                    |
| **5%**  | Maintenance reserve                                |

## Auto-burn mechanics

Every premium paid generates a small fee that accrues to the protocol in
USDC. When the accumulated fee crosses **\$500** OR after **50 successful
purchases** (whichever first), `TWAPBurner V2` triggers:

1. Read 1-hour LUMINA/USDC TWAP from the DEX (mitigates MEV).
2. Swap accumulated USDC fees → LUMINA.
3. Burn the resulting LUMINA via `LuminaToken.burn()`.

The burn fires automatically — there's no operator schedule. The rate tracks
protocol usage 1:1.

## Buyback engine

The `BuybackEngine` is **deployed on Base mainnet at
[`0x558F1675c10650A027e68BE33F8C5F290d8Ea307`](https://basescan.org/address/0x558F1675c10650A027e68BE33F8C5F290d8Ea307)**.
It receives the **8% buyback slice** of every fee and (audit fix M-10 added
commit-reveal MEV protection) handles larger periodic buybacks.
Operationally, these larger buys go through a private mempool to mitigate
sandwich attacks.

## Sustainability model

The protocol is designed to be self-funding once usage reaches a target
threshold:

* Premiums fund both the bond vault (for payouts) and the burn engine.
* The vault solvency floor (audit fix M-11) ensures `burnFromReserves` never
  starves the bond payout queue.