Virtual Mining
Last updated
Last updated
In addition to traditional mining, the LBUN Project has introduced a novel concept known as "Virtual Mining" through the use of NFTs (Non-Fungible Tokens). This innovative approach addresses the challenges that some individuals may face when trying to participate in mining, even within a permissionless blockchain environment. These challenges may include a lack of hardware, technical expertise, or the time required to monitor a physical miner. Moreover, issues like inconsistent access to electricity or a stable internet connection can also hinder participation. To enhance diversity and inclusivity, the LBUN Project has introduced Virtual Mining as an alternative way to indirectly support the traditional mining operation.
Virtual Mining via NFTs involves the purchase and ownership of mining NFTs, which, unlike traditional hardware miners, do not directly produce blocks through computational power. Instead, these NFTs serve as a form of financial backing for the mining operation. The funds raised from the sale of these NFTs primarily go towards supporting traditional miners by funding the 6-minute block generation rewards. A portion of the funds is allocated to core operations and the development of a Terra Classic payment gateway. There are a total of 672 mining NFTs, divided into four mining equipment options: excavators, TNT, jackhammers, and Pick & Shovel. Each NFT category has specific reward multipliers ranging from 1x to 1.8x, with higher reward multipliers corresponding to higher NFT costs, simulating the expense of better mining equipment and increased potential return on investment.
Virtual mining operates on a system of "virtual blocks" created once per hour. For each virtual block, one NFT is randomly selected to receive the reward. It's important to note that at least one third (224) of the NFT miners must be purchased to initiate the NFT virtual mining effort. Each NFT miner is eligible to win rewards for 12 months (8760 virtual blocks) starting the day after minting. The LUNC collected from the NFT purchases will be divided into two parts (80% for rewards pool, 20% for expenses). The rewards pool will be used to purchase BASE that will be used as the block reward. The reward amount will be determined by the total amount of BASE contributed by each of the active miners (within their 8760 virtual block eligibility) divided by 24 (hours). Miners wishing to extend their mining eligibility beyond 8760 virtual blocks will need to pay an additional fee. It's essential to understand that, much like traditional hardware mining, there is no guarantee of profit. Payouts to virtual miners will occur weekly, mirroring the process of traditional hardware mining.