LP-900: Impact Framework & Theory of Change

Abstract

This LP establishes the foundational framework for Lux Network's social impact strategy. It defines our Theory of Change, impact objectives, measurement approach, and reporting commitments. This framework guides all social impact initiatives and ensures they align with our mission to create equitable, accessible financial infrastructure.

Motivation

Blockchain technology promises to democratize finance, yet most networks lack clear frameworks for measuring whether they deliver on that promise. Without a Theory of Change:

1. Impact claims remain vague - "Financial inclusion" means nothing without measurable outcomes
2. Resource allocation lacks direction - Grants and development efforts scatter without strategy
3. Accountability gaps emerge - No way to verify if the network creates actual social benefit
4. Stakeholder trust erodes - Communities cannot assess whether the network serves their interests

This LP provides the strategic foundation for translating Lux Network's mission into measurable social outcomes aligned with UN Sustainable Development Goals.

Theory of Change

Vision

A world where financial infrastructure is accessible, transparent, and empowering for all participants, regardless of geography, economic status, or technical sophistication.

Mission

Build blockchain infrastructure that democratizes access to financial services, enables transparent and creates measurable positive outcomes for communities worldwide.

Theory of Change Model

INPUTS → ACTIVITIES → OUTPUTS → OUTCOMES → IMPACT

Inputs (What We Invest)

Resource	Purpose
Technology	Open-source blockchain infrastructure
Capital	Foundation grants and ecosystem funding
Expertise	Technical knowledge and governance experience
Network	Validator community and partnerships
Time	Long-term commitment to ecosystem development

Activities (What We Do)

Activity	Description
Protocol development	Build and maintain core blockchain infrastructure
Standards creation	Establish open standards (LPs, LRCs)
Ecosystem grants	Fund projects that expand access
Education	Create resources for developers and users
Community building	Foster inclusive validator and user communities

Outputs (What We Produce)

Output	Metric
Transaction throughput	Millions of transactions processed
Validator network	Number of active validators
Ecosystem projects	Funded and launched applications
Developer resources	Documentation, tools, tutorials
Standards published	LPs in Final status

Outcomes (What Changes)

Outcome	Indicator
Increased access	Users in underserved regions
Lower costs	Average transaction fees
Economic participation	Value enabled for users
Governance participation	Active LP/governance participants
Developer adoption	Monthly active developers

Impact (Ultimate Change)

Impact Goal	Alignment
Financial inclusion	UN SDG 1, 8, 10
Economic empowerment	UN SDG 1, 8, 9
Innovation ecosystem	UN SDG 9, 17
Transparent governance	UN SDG 16
Sustainable infrastructure	UN SDG 7, 12, 13

Impact Objectives

Primary Objectives

1. Financial Inclusion

Goal: Enable access to financial services for underserved populations

Target	2025	2027	2030
Users in emerging markets	100K	1M	10M
Average tx cost	<$0.01	<$0.005	<$0.001
Languages supported	10	20	40

Key Initiatives:

• Low-cost payment rails
• Multilingual documentation and UIs
• Mobile-first application support
• Fiat on/off ramp partnerships

2. Economic Empowerment

Goal: Create economic opportunities for participants

Target	2025	2027	2030
Validator rewards distributed	$50M	$200M	$1B
Grant recipients	100	500	2000
Jobs created (ecosystem)	500	2000	10000

Key Initiatives:

• Validator delegation programs
• Developer grants and bounties
• Ecosystem project incubation
• Skills training programs

3. Governance Participation

Goal: Enable meaningful participation in protocol governance

Target	2025	2027	2030
Governance participants	1000	5000	20000
LP contributions	50	200	500
Regional representation	30 countries	50 countries	100 countries

Key Initiatives:

• Accessible governance documentation
• Regional ambassador programs
• Governance incentives
• Translation of governance materials

4. Developer Ecosystem

Goal: Foster a vibrant, diverse developer community

Target	2025	2027	2030
Monthly active developers	500	2000	10000
Countries represented	30	60	100
Open-source contributions	1000	5000	20000

Key Initiatives:

• Developer education programs
• Hackathons and coding events
• Documentation improvements
• Developer tooling investments

Stakeholder Analysis

Primary Stakeholders

Stakeholder	Interest	Engagement Method
Token holders	Value	Governance participation, rewards
Validators	Rewards, influence	Delegation, LP process
Developers	Tools, opportunity	Grants, documentation
Users	Access, low cost	Applications, support
Ecosystem projects	Funding, support	Grants, partnerships

Secondary Stakeholders

Stakeholder	Interest	Engagement Method
Regulators	Compliance, clarity	Proactive engagement
Partners	Collaboration	Joint initiatives
Academic/research	Innovation	Research grants
Civil society	Social outcomes	Advisory, partnerships
Media	Transparency	Communications

Stakeholder Engagement Matrix

Stakeholder	Power	Interest	Strategy
Token holders	High	High	Close partnership
Validators	High	High	Close partnership
Developers	Medium	High	Active engagement
Users	Low	High	Regular communication
Regulators	High	Medium	Proactive management
Partners	Medium	Medium	Strategic engagement

Impact Measurement Approach

Framework

Aligned with IRIS+ Catalog and IMP Five Dimensions of Impact:

Five Dimensions

1. What: What outcomes occur?
2. Who: Who experiences the outcome?
3. How Much: How much change occurs?
4. Contribution: What is our contribution to the change?
5. Risk: What is the risk that impact doesn't occur?

Metrics Hierarchy

Level	Type	Example
Impact	Long-term change	Lives improved
Outcome	Behavior change	Users accessing services
Output	Deliverables	Transactions processed
Activity	Actions taken	Features developed
Input	Resources invested	Capital deployed

Data Collection

Data Type	Method	Frequency
On-chain metrics	Automated collection	Real-time
Validator surveys	Annual survey	Annual
User research	Sampling + interviews	Quarterly
Ecosystem tracking	Project reporting	Monthly
Third-party data	Research partnerships	Annual

Impact Governance

Oversight Structure

Body	Responsibility
Board	Impact strategy approval
ESG Committee	Impact policy oversight
Impact Lead	Day-to-day management
Working Groups	Topic-specific initiatives

Decision Framework

Impact considerations integrated into:

• Grant allocation decisions
• Protocol development priorities
• Partnership evaluations
• Resource allocation

Accountability

• Annual impact report (public)
• Quarterly progress updates
• Third-party impact assessment (every 2 years)
• Community feedback mechanisms

Reporting Commitments

Public Reports

Report	Frequency	Contents
Annual Impact Report	Annual	Full impact assessment
Quarterly Updates	Quarterly	Progress against targets
Ecosystem Report	Annual	Grants, projects, ecosystem health

Report Contents

Annual Impact Report includes:

1. Executive summary
2. Theory of Change progress
3. Impact metrics by objective
4. Stakeholder outcomes
5. Case studies and stories
6. Challenges and learnings
7. Next year priorities

Verification

• Internal data validation
• Third-party review for key metrics
• Community feedback integration
• Continuous improvement process

Integration with ESG

Alignment

ESG Pillar	Impact Connection
Environmental	Sustainable infrastructure enables long-term impact
Social	Primary focus of impact framework
Governance	Enables participation and transparency

Cross-References

Impact Objective	Related LP
Financial inclusion	LP-920 (Community Development)
Economic empowerment	LP-930 (Financial Inclusion Metrics)
Governance participation	LP-910 (Stakeholder Engagement)
Developer ecosystem	LP-920 (Grants)

Implementation Timeline

Phase 1: Foundation (2025)

• Establish baseline metrics
• Launch impact measurement infrastructure
• Publish first annual impact report
• Set 2027 targets

Phase 2: Scale (2026-2027)

• Expand data collection
• Increase third-party verification
• Launch regional impact initiatives
• Refine theory of change based on learnings

Phase 3: Maturity (2028-2030)

• Full impact reporting aligned with international standards
• Integrated impact-financial reporting
• Sector leadership in blockchain impact measurement
• Achievement of 2030 targets

Related LPs

• LP-800: ESG Principles and Commitments
• LP-901: Impact Measurement Methodology
• LP-910: Stakeholder Engagement
• LP-920: Community Development & Grants
• LP-930: Financial Inclusion Metrics
• LP-850: ESG Standards Alignment Matrix

Changelog

Version	Date	Changes
1.0	2025-12-17	Initial draft

Copyright

Copyright and related rights waived via CC0.