Overview

Lunos operates as a decentralized insurance protocol, focusing on protecting digital assets against various risks including smart contract vulnerabilities, stablecoin depegs, and validator slashing events. The protocol utilizes staking pools to generate coverage capacity, allowing participants to earn yield while providing capital for policy issuance ^[1].

The platform's development comes at a critical time in the Web3 ecosystem, where approximately $77 billion in cumulative funds have been lost, with only $6.6 billion recovered. Statistics indicate a major security incident occurs approximately every 4.5 days, with over 1,700 documented scams, hacks, and exploit events ^[1].

Technology Architecture

AVS Integration

Lunos implements Actively Validated Services (AVS) to enhance its risk management capabilities:

• AI-powered validation modules for automated claims processing
• Decentralized validation mechanisms to eliminate human bias
• Scalable infrastructure designed to adapt to emerging Web3 risks ^[1]

Coverage Mechanisms

The protocol employs several key technological components:

• Smart contract-based policy issuance
• Automated, on-chain claim settlements
• Real-world data integration for RWA coverage
• Dynamic risk assessment algorithms ^[1]

Products and Services

Core Coverage Options

• Smart Contract Vulnerability Protection
• Stablecoin Depeg Coverage
• Validator Slashing Protection
• Real-World Asset (RWA) Coverage ^[1]

Features

• Automated claims processing
• Trustless validation system
• Transparent policy terms
• Real-time risk monitoring ^[1]

Staking System

The protocol's coverage capacity is supported by staking pools that:

• Generate yield for participants
• Provide capital backing for policy issuance
• Enable decentralized risk sharing ^[1]

Use Cases

For Individual Users

• Portfolio risk management
• Asset protection against hacks
• Stablecoin depeg protection
• Staking security ^[1]

For Protocols

• Project-wide coverage solutions
• User protection mechanisms
• Enhanced protocol security
• Risk mitigation strategies ^[1]

Real-World Asset Integration

Lunos has expanded its coverage to include real-world assets through:

• Integration of external data feeds
• Dynamic coverage adjustments
• Protection against physical asset risks
• Market fluctuation coverage ^[1]

Security Framework

The protocol implements multiple security layers:

• Smart contract auditing
• Automated threat detection
• Proactive risk identification
• Continuous security monitoring ^[1]

Market Statistics

Key metrics demonstrating the need for coverage solutions:

• $77B in global cumulative funds lost
• $6.6B in recovered funds
• Average of one major hack every 4.5 days
• Over 1,700 documented security incidents ^[1]