The N1 draft project of 1962 spoke of 'establishment of a lunar base and regular traffic between the earth and the moon'. Korolev raised the matter informally at tea with Chief Designer of rocket complexes Vladimir Pavlovich Barmin, head of GSKB SpetsMash (State Union Design Bureau of Special Machine-Building). Barmin was interested in pursuing the subject, but how could such a base be placed on the moon. 'You just design the base', Korolev assured him, 'and I'll figure out how to get it there'. The project was known to SpetsMash as the 'Long-term Lunar Base' (DLB) and to OKB-1 as 'Zvezda'. Consideration was given to using the same elements in expeditions to other planets. Under the DLB studies SpetsMash defined purposes of the base, the principles of its construction, phases of its deployment and composition of its scientific and support equipment. The enthusiasts that worked on the project at Zvezda were naturally known as 'lunatics'.

The lunar regolith would be mined for He-3 for use in nuclear fusion power plants on earth. This isotope is very rare on the earth but has been deposited in the lunar soil by billions of years of solar wind. Use of He-3 would make nuclear fusion conditions much easier to attain, removing one of the major roadblocks to obtaining nuclear fusion conditions in plasma containment reactors.