Lava Financial — An Introduction

4 min readMar 30, 2022

Back in December of 2021, Lava Financial began as a simple idea: how can we utilize the popular DaaS investment structure while avoiding the pitfalls that other projects suffered from? How can we enable the ability for investors to park their money in a project that can provide steady passive income in perpetuity?

The answer is a protocol that pays investors using actual treasury returns instead of relying on new capital to pay old investors. Thus, the idea of nLAVA was born — a token separate from native LAVA, used solely for treasury revenue redemption.

Since December, the project has evolved significantly. Self-sustainability is the core ethos of Lava Financial, and it’s evident in the features that have been added over the months. This document serves as a general update — a state of the protocol address.

What is Lava Financial?

We are a hybrid Defi-as-a-Service protocol where investors can purchase a node and receive a small percentage of that investment back every day, for life.
One way to think of it is like purchasing a fruit tree. There is a large up front cost, but that tree will produce fruit forever as long as you keep it alive. The problem with this model is that once you sell too many trees, they start to compete for resources and eventually die off. This is where Lava Financial aims to be different. With our model, part of what your tree produces are nutrients to keep itself alive. To get more technical — we offset selling pressure on our native token by allowing investors to take profit directly from the treasury’s returns on its investments.

Where have other protocols gone wrong?

There are numerous ways that other protocols have failed. Some tried to incentivize investors by offering ridiculous returns — upwards of 10% daily in some cases. These protocols lasted 1–2 weeks at most due to uncontrollable emissions.
Some allowed node creation to spiral out of control and are dying a slow death — again due to uncontrollable emissions. Others have failed to utilize their treasury to its highest potential (or have a treasury full of useless native tokens).

What is Lava‘s plan?

Our core plan is broken down into three phases.
Phase 1 — Treasury Expansion
During this phase we will be focusing on treasury growth and establishing all key features, including the construction of multiple sister projects with their own revenue streams and target audience. The goal of this phase is to get the treasury to a point where it can start to earn us sizeable yield.
Phase 2 — nLAVA Transition
This phase will focus on the introduction of nLAVA, treasury growth and gradual capping of node creation, at which point nodes will become tradable on our in-house NFT marketplace.
Phase 3 — Self Sustainability
By this phase we will have reached the point where the protocol can sustain itself and is only using the $LAVA token during periods of irregular cash flow.

What are Lava’s key features?

- Deflationary Tokenomics — 10 million $LAVA token cap, 10% token burn on node creation, and eventual node cap.
- 3 Node Tiers — Higher node tiers for investors who wish to allocate more capital for a larger return.
- Flexible Micro Nodes — In order to be accessible to all wallet sizes, we have micro nodes which can be created with as little as 1 token.
- Attentive Treasury Investments — Our treasury will be closely managed by experts in the DeFi space to maximize its revenue.
- Node Fusion — To enable a clear upgrade path, nodes will be able to be combined to create higher tiers, for a fee.
- Governance — Every node creation comes with an airdrop of gLAVA governance tokens, used for voting rights on all major protocol decisions.
- In-House Sister Projects — Three in-house projects with their own development teams to provide additional sources of revenue for the treasury
- Angel Investments — In-house seed investment program using $LAVA as the exchange token, allowing investors to secure spots in early presales that normally would require substantial up front capital.
- Booster NFTs — For users who wish to boost their rewards beyond the initial ~1%. Also serves as a means of revenue generation from royalties.
- Zero Team Tokens — Our team only gets paid through a small cut of treasury profit, plus their whitelist allocations.

When will the project launch and how can investors get involved?

Our NFTs are being worked on currently and should be finished within the next 7–10 days. Audits of all contracts will be completed prior to any funds being taken. All core team members will go through a KYC process, as well as publicly doxxing, to ensure investor confidence.
We expect public launch to take place during the second week of April, however this is subject to change based on dApp testing results.
There will be many more articles released over the coming weeks and months, further outlining the project and diving deeper into specifics. We’re incredibly excited to be building this protocol, and our eyes are set on launch.