This page is provided to current and prospective holders of the cryptocurrency “Loki” in order to disclose relevant information in regards to the corporate structure of the primary contributors to the “Loki” software, and legal rights and responsibilities that are or are not afforded to users of the “Loki” software.
“Loki” is a protocol that uses peer-to-peer networking technology and cryptography to establish a user-operated decentralised payments and private routing network. This protocol was defined in a whitepaper, which laid out the broad concepts of the network. The implementation of this concept is written into the ‘loki-project/loki’ software. This software was derived from the Monero project, another cryptocurrency project, and is completely open source. It is made available for anyone to use WITHOUT WARRANTY. It is up to the user of the software to review the code, assess its strengths, weaknesses, and security, and determine its suitability for their purposes. Contributors and distributors of this software cannot be held liable for any loss incurred in association with its use.
The ‘github.com/loki-project/loki’ software is currently the only known software that is compatible with the “Loki” network. However, anyone is able to create alternative implementations of the Loki protocol, whether these alternative distributions are based on the existing software or not. So long as the rules of the network are followed, users of alternative software can interact with other users on the network without restriction.
At times, the users of the “Loki” network may decide to change the network rules in order to meet some end. This change is often called a ‘hard-fork’ or similar, and if successful, will render older versions or incompatible alternative versions inactive on the new network. These changes are substantiated by the miners of “Loki”. Users should familiarise themselves with the hard-fork process present in many cryptocurrency projects before using this software.
Nobody owns the “Loki” concept, and the Loki software is open-source, meaning anyone can use, alter, or distribute the software for whatever purpose they desire. The Loki network is not owned or controlled by any one. The operation of the network is as a result of users operating nodes and mining the blockchain. No company is responsible for its maintenance or operation, and no one party has the authority to block transactions or shut down the network. However, flaws in the software or certain attacks could result in the network being temporarily or permanently stopped.
While no one owns the software or concept, branding and other intellectual property is owned by various companies that work on the Loki project. Domain names, GitHub repositories, trademarks, and other branding materials are held by the Loki Foundation, whose legal name is LAG Foundation Ltd, a not-for-profit company limited by guarantee based in Australia.
Users of the software can own Loki coins by means of possessing a private key associated with a public key that has Loki connected to it on the blockchain. Users can generate a proof that tells the rest of the network that a given ‘output’ (a record of an amount of Loki) is owned by the user. If that private key is lost or exposed, the coins sitting in outputs that the private key can unlock can be stolen or be rendered permanently irrecoverable.
The Loki software provided to users of Loki is issued with the following:
THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS “AS IS” AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT HOLDER OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
LAG Foundation Ltd, Rangeproof Pty Ltd, and other companies and individuals who work on the Loki project can and often do participate in the operation of the Loki network. This includes the running of full nodes, the mining of blocks, and the creation and maintenance of Service Nodes.
LAG Foundation Ltd does run a limited number of Service Nodes, using the fund generated during the premine and over time through the governance block reward. A policy has been implemented by the Board to run up to 10% of the Service Node network on a 30 day average basis. For example, if there are 450 nodes on the network on average over the last 30 days, the Foundation will run no more than 45 nodes. This limit effectively means that the Foundation will be collecting 10% of the block reward, between its 10% share of the Service Node network, and the standard 5% governance reward.
The Foundation uses the exact same software as is publicly available on the loki-project/loki GitHub repository.
LAG Foundation Ltd, Rangeproof Pty Ltd, and other companies and individuals who work on the Loki project can and often do participate in the Loki markets.
LAG Foundation Ltd sold over 13 million Loki coins to various contributors in the ‘premine’ event, and has continued to buy and sell Loki directly with various companies and individuals.
Loki coins are publicly available on several marketplaces that are not owned or operated in any way by LAG Foundation Ltd or its associates. Flaws in the exchange software or flaws in the underlying Loki software may result in losses by users of these exchanges. At present, NO marketplace exists for Loki that is regulated or protected by governments in any way. Usage of these exchanges can be extremely risky and users should be aware that information provided to the user by these exchanges may be false.
However, LAG Foundation Ltd, Rangeproof Pty Ltd, and other companies that work on the Loki Project often participate in these exchanges, and employ a number of trading strategies to further their interests. These strategies include purchasing and selling Loki in order to complete large over-the-counter deals, placing orders on both sides of an exchange’s order book in order to make a profit on the spread (sometimes called ‘market making’), and speculatively trading. Any volume, price, or orderbook information provided by exchanges may be impacted by the activities of LAG Foundation Ltd, Rangeproof Pty Ltd and/or its associates.
As far as LAG Foundation Ltd or Rangeproof Pty Ltd have been able to determine, this participation is not prevented by any current Australian laws. By disclosing this information here, LAG Foundation Ltd and Rangeproof Pty Ltd believe it has met its obligations under Australian Consumer Law.
LAG Foundation Ltd Wallets
This section will describe the process by which any third party can review and audit the wallets controlled by the LAG Foundation Ltd on the Loki blockchain to validate that the resolutions have been correctly followed. Auditors will need to have modified versions of the default wallet software in order to view some of these transactions, as the software by default is not set up to correctly view a second output in a coinbase transaction.
The first block in the Loki blockchain contains a block reward of 22,500,000 Loki. In order to view these outputs correctly, a patch is required to modify the wallet code to spot these unusual outputs, but can also be seen on the lokiblocks.com block explorer by looking at block #0.
Reserve Wallet (PREMINE DESTINATION)
Public Address: LB5Q4XYTd11haHTeFd6mJQ4XBaaxQ9TXuNs7URbBjdLVPQT1WzB9ufzhBFAYibG8gBZsuE7VAj7dAh8W46G8EA3vDPbK1Pt
View Key: d905563f1cc0eada663d0491c78637490a07bd95f4bdb794c20ba605c8a91b00
Please understand that when looking at the premine wallet with the view key, it will show a balance ABOVE 22.5 Million. This is because a view key only allows you to see incoming transactions. Due to the nature of transactions in Loki (inherited from Monero) most outgoing transactions send more than the desired amount, the remaining change is then sent back to the original address. The amount returned is considered an incoming transaction. The view key does not allow you to see outgoing transactions which is why the amount will look larger than it is in reality.
The network was bootstrapped and mined for approximately an hour before the code was released. The first publicly minable block was block 154. All 154 blocks were mined to a wallet controlled by the LAG Foundation Ltd. The reason the software was not immediately released upon the network’s creation was to ensure that the network was stable and that transfers were working between Foundation wallets. Though fairly inconsequential compared to the rest of the premine, the coins mined from these 154 blocks (approx 18,800 Loki) will be put to good use, as determined by the board of the Foundation in accordance with its constitution.
Every Loki block contains three outputs. One goes to the miner who constructs the block, the next to a random Service Node, and the other goes to the Governance wallet specified in the code. Other nodes check that this output was sent to the right place as a consensus rule. Auditors can check the Governance block reward wallet with the same patch to see incoming block rewards for 5% of the expected block reward.
Governance Wallet (BLOCK REWARD)
Public Address: LCFxT37LAogDn1jLQKf4y7aAqfi21DjovX9qyijaLYQSdrxY1U5VGcnMJMjWrD9RhjeK5Lym67wZ73uh9AujXLQ1RKmXEyL
View Key: 934f692dd8506dec9647602ce0b8f31ea92776b8a0d970d55107a7135c7b8409
Staking Wallet (SERVICE NODE WALLET)
Public Address: L8DGNNYyHUU1dAgUa3UZV9F1KePL6Ex9YCfBTPmhFgfrV4YKh2syu7JWvPHqY47cRFFR7XYQ23JVh9YbWR9zn6Qy7uDbg3P
View Key: f8621f26b497a809e8cb11971244947ff7e65f43a19218d4afd13b4fda5afe0b
For security reasons, we will not specify the exact nature of the wallet/private key management of wallets controlled by the LAG Foundation Ltd, but members of the community should know that many considerations have been made regarding the safe storage and usage of these wallets.
Once more, a reminder that the view key will only allow the user to see incoming transactions into the wallets. Key images can also be provided, but should not be considered as a trustworthy source, as no evidence of the ultimate recipient of coins can be derived from these key images.
We are keeping records of all of our transactions and collecting receipts and invoices for payments that are made and the Foundation will be subjected to an audit from a major accounting firm. The auditor will be granted access to the backend of these wallets and be given evidence to prove the validity of the destination addresses. We are in discussions with a number of highly reputable firms in order to produce a financial statement and report on the status of the Foundation’s wallets at the end of its first financial year. This report will be published on the Loki website when available.