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44 lines
2.1 KiB
TeX
44 lines
2.1 KiB
TeX
\section{Introduction}
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The blockchain industry stands at an impasse. Public blockchains
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(Bitcoin, Ethereum) offer transparency and permissionless access but
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cannot issue regulated financial instruments without violating
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securities laws. Permissioned chains (Hyperledger, R3 Corda) satisfy
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regulators but abandon the neutrality and composability that make
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public blockchains valuable. Centralized exchanges (MtGox, Bitfinex,
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Coincheck) combine the worst of both: regulatory exposure without
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user custody~\cite{hacks}. Users have lost more than 980{,}000 BTC
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(approximately USD 40 billion at current rates) to exchange hacks
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since 2011.
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Lux is designed to resolve this impasse. By operating under an
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Isle of Man money transmitter license while retaining non-custodial
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key management, open validator participation (subject to KYC/AML),
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and public transaction auditability, Lux offers a blockchain that is
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\emph{simultaneously} regulated and decentralized. The network's
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hundred-validator founding set is both small enough to operate under
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a coherent compliance regime and large enough to resist the
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centralization risks that have plagued purely federated designs.
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Lux addresses three additional concerns that existing blockchains do
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not handle well:
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\begin{itemize}[nosep]
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\item \textbf{Quantum resistance}: Shor's algorithm breaks ECDSA and
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RSA on a sufficiently large quantum computer. Lux adopts
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lattice-based primitives (from the \texttt{luxfi/lattice}
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library, based on CKKS~\cite{ckks} and BFV~\cite{bfv}) at
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every layer that touches user funds.
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\item \textbf{Regulatory compliance}: Lux integrates KYC/AML at the
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protocol layer via the Identity Chain (I-Chain) and the
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Decentralized Identifier (DID) specification. No unregistered
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security is issuable on the network.
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\item \textbf{Interoperability}: Lux bridges to existing blockchains
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through multi-party threshold signatures
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(MPC)~\cite{threshold-mpc}, providing cross-chain liquidity
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without trusted custodians.
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\end{itemize}
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%% ============================================================
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