# Lumi Smart Contract Overview

## **Smart Contract Implementation & Fractionalized Gold-Backed Rights**

####  Smart Contract Infrastructure: Tokenization, Redemption & Proof of Reserve

LumiVault’s smart contract infrastructure is purpose-built to facilitate the secure, transparent, and immutable tokenization of physical gold reserves, while ensuring seamless on-chain redemption for real-world gold.

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#### Gold-Backed Tokenization

• The $LVT token is fully backed by 80 tonnes of insured physical gold, with each token representing a fixed gold weight ratio.\
• Tokens are deployed on Ethereum Layer 2 to ensure gas efficiency and fast execution.\
• As new gold reserves are verified and added, corresponding $LVT tokens are minted, maintaining the 1:1 gold-backing ratio.\
• When users redeem tokens (min. 1,000 $LVT) for gold-backed assets, the smart contract burns the equivalent supply.

This mint-burn mechanism ensures that the circulating token supply always reflects the actual reserves held in secure custody.

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#### On-Chain Proof of Reserve (PoR)

• LumiVault integrates real-time Proof of Reserve directly into the Dapp interface.\
• Gold reserves held in custody are represented by PAXG tokens — a regulated, gold-backed digital asset issued by Paxos.\
• Every inflow/outflow of reserves is on-chain verified and reflected transparently, enabling users to track the exact PAXG backing ratio in real time.\
• Smart contracts enforce hard constraints that prevent minting beyond validated reserves.

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####  Infrastructure Principles

* ✅ No staking, no inflationary emissions
* ✅ Real asset redemption model (1,000 $LVT ↔ PAXG)
* ✅ Non-custodial, permissionless redemption
* ✅ Immutable mint/burn contract logic
* ✅ Auditability via decentralized oracles & PoR dashboard
* ✅ Ethereum Layer 2 scalability with secure bridging\ <br>

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Through this architecture, LumiVault transforms tokenized gold into a trust-minimized, on-chain asset class — enabling users to access, track, and redeem physical gold in a fully decentralized manner, without relying on centralized intermediaries or opaque reserves


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