LP-930: Financial Inclusion Metrics

Abstract

This LP establishes the metrics framework for measuring and reporting Lux Network's contribution to financial inclusion. It defines key indicators, data collection methods, and targets aligned with UN Sustainable Development Goals 1 (No Poverty), 8 (Decent Work), and 10 (Reduced Inequalities).

Motivation

Financial inclusion is central to Lux Network's social mission, yet the term is often used without rigorous definition. Without specific metrics:

1. Claims are unverifiable - "Serving the underserved" means nothing without data
2. Progress is unmeasurable - Cannot improve what isn't tracked
3. SDG alignment is superficial - Must demonstrate actual contribution to targets
4. Impact investors require evidence - Vague claims don't satisfy due diligence

This LP operationalizes financial inclusion with specific, measurable indicators that enable genuine accountability and continuous improvement.

Financial Inclusion Framework

Definition

Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit, and insurance – delivered in a responsible and sustainable way.

Lux's Role

Lux Network contributes to financial inclusion by:

1. Lowering costs: Reducing transaction and access costs
2. Expanding access: Enabling participation without traditional banking
3. Enabling innovation: Supporting applications that serve underserved populations
4. Ensuring transparency: Providing auditable, trustworthy infrastructure

SDG Alignment

SDG	Target	Lux Contribution
SDG 1.4	Equal rights to economic resources	Access to financial infrastructure
SDG 8.3	Formalization and growth of MSMEs	Business payment infrastructure
SDG 8.10	Access to banking and financial services	Inclusive financial infrastructure
SDG 10.c	Reduce remittance costs to <3%	Low-cost cross-border transfers

Core Metrics

Access Metrics

ACC-01: Users in Underserved Regions

Definition: Unique addresses actively transacting from countries with <50% banking penetration.

Attribute	Value
IRIS+ Alignment	PI7098
SDG Indicator	8.10.2
Unit	Count
Target 2025	100,000
Target 2030	10,000,000

Countries included (banking penetration <50%):

• Sub-Saharan Africa: Nigeria, Kenya, Tanzania, Uganda, Ghana, etc.
• South Asia: Pakistan, Bangladesh, Myanmar
• Southeast Asia: Philippines, Vietnam, Indonesia
• Latin America: Mexico, Colombia, Peru
• Middle East/North Africa: Egypt, Morocco

Data collection:

• Wallet country declaration (opt-in)
• IP geolocation (privacy-preserving aggregation)
• Partner application user data

ACC-02: First-Time Crypto Users

Definition: New addresses with first-ever on-chain transaction on Lux.

Attribute	Value
IRIS+ Alignment	PI2822 (modified)
Unit	Count per period
Frequency	Monthly

Methodology:

• Track new address generation
• Cross-reference with known addresses from other chains
• Report "likely first-time" with confidence interval

ACC-03: Mobile Access Rate

Definition: Percentage of active users accessing via mobile devices.

Attribute	Value
IRIS+ Alignment	OI1571 (modified)
Unit	Percentage
Target	>70% in emerging markets

Relevance: Mobile access indicates reaching populations without desktop/laptop computers, which correlates with lower income segments.

Affordability Metrics

AFF-01: Average Transaction Cost

Definition: Mean transaction fee for standard value transfer.

Attribute	Value
IRIS+ Alignment	Custom
Unit	USD
Target 2025	<$0.01
Target 2030	<$0.001

Calculation:

AFF-01 = Mean(tx_fee_USD) WHERE tx_type = 'transfer'

AFF-02: Cost as % of Transaction Value

Definition: Transaction fee as percentage of value transferred.

Attribute	Value
IRIS+ Alignment	Custom
SDG Indicator	10.c.1 (for remittances)
Unit	Percentage
Target	<1% for amounts >$20

Calculation:

AFF-02 = Mean(tx_fee / tx_value) × 100

Segmentation:

Value Range	Target Cost %
<$20 (micro)	<5%
$20-$200	<1%
$200-$1000	<0.5%
>$1000	<0.1%

AFF-03: Cross-Border Transfer Cost

Definition: Total cost for a $200 remittance-equivalent transfer.

Attribute	Value
IRIS+ Alignment	Custom
SDG Indicator	10.c.1
Unit	USD and %
Target	<$6 (<3%) by 2030

Calculation includes:

• Network transaction fee
• Partner application fees (if applicable)
• Estimated on/off ramp costs

Usage Metrics

USE-01: Transaction Volume by User Segment

Definition: Transaction count and value segmented by user characteristics.

Segment	Definition
Micro users	<$100 monthly volume
Small users	$100-$1000 monthly
Medium users	$1000-$10000 monthly
Large users	>$10000 monthly

Relevance: High micro/small user share indicates reaching underserved populations.

USE-02: Use Case Distribution

Definition: Transaction categorization by primary use case.

Use Case	Indicators
Remittances	Cross-border transfers, stablecoin-to-fiat flows
Payments	Merchant transactions, recurring payments
Savings	Stablecoin holding patterns
DeFi access	Lending, yield participation

USE-03: Retention Rate

Definition: Percentage of new users remaining active after 3 months.

Attribute	Value
IRIS+ Alignment	OI7112 (modified)
Unit	Percentage
Target	>40%

Calculation:

USE-03 = Count(active_month_3) / Count(new_month_0) × 100

Outcome Metrics

OUT-01: Value Enabled

Definition: Total USD value of transactions by users in underserved regions.

Attribute	Value
IRIS+ Alignment	PI9468 (modified)
Unit	USD
Frequency	Monthly

OUT-02: Cost Savings Estimate

Definition: Estimated savings compared to traditional alternatives.

Attribute	Value
IRIS+ Alignment	OI2822 (modified)
Unit	USD
Frequency	Annual

Methodology:

Savings = Volume × (Alternative_fee% - Lux_fee%)

Where alternative fee = average traditional remittance cost (currently ~6.4% globally).

OUT-03: MSMEs Served

Definition: Micro, small, and medium enterprises using Lux for business transactions.

Attribute	Value
IRIS+ Alignment	PI2608
SDG Indicator	8.3.1 (indirect)
Unit	Count

Identification:

• Ecosystem application reporting
• Transaction pattern analysis
• Partner data

Data Collection

Primary Sources

Source	Data	Method
On-chain	Transactions, addresses, fees	Automated indexing
Wallet apps	User demographics, device type	Aggregated analytics
Ecosystem partners	Use case data, user info	Partner reporting
User surveys	Qualitative data, outcomes	Annual survey

Privacy Preservation

Principle	Implementation
Aggregation	Report only aggregated statistics
Opt-in	Detailed data only with user consent
Anonymization	No individual address tracking
Purpose limitation	Data used only for stated purposes

Data Quality

Metric	Quality Level	Confidence
Transaction data	High	±5%
Geographic data	Medium	±15%
User segments	Medium	±20%
Outcome estimates	Low	±30%

Targets & Roadmap

2025 Targets

Metric	Target	Baseline
ACC-01: Users in underserved regions	100,000	TBD
AFF-01: Average tx cost	<$0.01	TBD
AFF-03: Remittance cost	<5%	TBD
USE-03: Retention rate	>30%	TBD

2027 Targets

Metric	Target
ACC-01: Users in underserved regions	1,000,000
AFF-01: Average tx cost	<$0.005
AFF-03: Remittance cost	<4%
USE-03: Retention rate	>35%

2030 Targets

Metric	Target	SDG Alignment
ACC-01: Users in underserved regions	10,000,000	SDG 8.10.2
AFF-01: Average tx cost	<$0.001	SDG 10.c.1
AFF-03: Remittance cost	<3%	SDG 10.c.1
USE-03: Retention rate	>40%	-
OUT-02: Cost savings	>$100M cumulative	SDG 1.4

Reporting

Dashboard

Location: explorer.lux.network/inclusion

Contents:

• Real-time access metrics
• Geographic distribution
• Cost metrics
• Trend charts

Periodic Reports

Report	Frequency	Contents
Inclusion brief	Monthly	Key metrics summary
Quarterly report	Quarterly	Detailed metrics, trends
Annual impact report	Annual	Full analysis, outcomes, stories

External Alignment

Report metrics to:

• IRIS+: Annual contribution to catalog
• GIIN: ImpactBase profile
• SDG reporting: Annual SDG contribution report

Initiatives

Supporting Programs

Initiative	Goal	Metrics Link
Low-fee corridors	Target <3% cost on key remittance routes	AFF-02, AFF-03
Mobile-first apps	Fund mobile wallet development	ACC-03
Regional expansion	Support developers in emerging markets	ACC-01
Education	Financial literacy programs	OUT-03

Partnerships

Partner Type	Purpose	Example
Fintech apps	User acquisition in target markets	Mobile wallets
Remittance providers	On/off ramp integration	Regional providers
NGOs	Reaching underserved communities	Financial inclusion orgs
Research	Impact measurement validation	Universities

Governance

Oversight

• Impact Lead: Day-to-day metric tracking
• ESG Committee: Quarterly review
• Board: Annual strategy review

Target Setting

Annual process:

1. Review prior year performance
2. Assess market opportunity
3. Propose targets to ESG Committee
4. Board approval
5. Public commitment

Continuous Improvement

• Annual methodology review
• Stakeholder feedback integration
• Academic partnership for validation
• Industry benchmarking

Related LPs

• LP-800: ESG Principles and Commitments
• LP-900: Impact Framework & Theory of Change
• LP-901: Impact Measurement Methodology
• LP-910: Stakeholder Engagement
• LP-920: Community Development & Grants
• 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.