Kujira’s Story — How everything is connected:
This far, Team Kujira has launched three individual products, that stand on their own. Besides the Kujira Blockchain and the Kuji Token, there are:
- FIN the order book exchange
- Orca where you can bid on liquidations
- And USK, Kujira’s own native Stablecoin
But just a few days ago, they launched another product that has the power to change everything: The Liquidity Platform is called BOW
In this story, we will find out that all of these products are connected and how BOW fits into the bigger picture. We will see that BOW brings them closer to their goal: A decentralized Economy for sustainable Yield.
The beginning of Kujira:
Before Kujira launched its own Blockchain and before it started to build its Ecosystem its first Product was Orca. Because ORCA originally launched on Terra Luna.
On Terra Luna, it was common practice to use crypto to mint Stablecoins. Basically like a loan. For example, it was possible to use $1000 worth of Ethereum to mint $400 new dollars.
It often happened that the collateral of the loan decreased in price and the loan got liquidated, which means the collateral is sold on the open market. You keep your Stablecoins, but the collateral that you used to mint it gets sold.
It’s usually profitable to purchase this collateral when a loan gets liquidated because you can buy it below the market price.
However, this is usually not possible for retail investors, because you need advanced trending bots to participate in this market.
And this was the exact use case of ORCA on Terra Luna. With ORCA, retail investors could participate and purchase liquidated collateral below the market price.
So, Kujira’s Orca was already a popular product on Terra Luna. If you want a detailed explanation of ORCA you can read this article.
When Terra Luna collapsed Kujira obviously had two options:
- either to give up or
- to pivot to another blockchain.
Turns out they decided on the third option to launch their own Blockchain and start working on their own Ecosystem.
After they succeeded to launch their own blockchain they immediately started to relaunch their first Product:
FIN the decentralized order book exchange:
You can imagine FIN like Kucoin but 100% decentralized and on-chain. There is no need for inflationary token incentives because the liquidity is provided by sellers, arbitrage bots, and market makers.
Fin was originally launched on Terra Luna as well, but that was right before the collapse of UST. When you take a look at how FIN technically works you can see that it needs a lot of “bandwidth” so to say.
This “bandwidth” was a problem on Terra Luna, so the relaunch on the Kujira Blockchain actually made FIN work even better!
After Kujira launched FIN it was not certain the exchange would be a success. There already is a gigantic Decentralised Exchange in the Cosmos: Osmosis, it remained a question if FIN could attract any trading volume at all. But they did.
Within one week of the launch, almost $1m in volume has been traded on Fin and the launch succeeded.
The need for a stablecoin:
After Kujira’s successful relaunch and the success they had with FIN, it was time to relaunch their Core Product ORCA. But there was a problem.
ORCA is a platform to bid on liquidations, but there was no place on the Kujira Blockchain to take out a loan.
So, they had to build their own native Stable Coin: USK
USK is different from UST and it’s way more resilient to collapsing than Terra Luna. UST was backed by Luna the protocol’s own Token.
USK is backed by ATOM the biggest Token in the Cosmos Ecosystem. In order to mint USK, you need to provide ATOM as collateral. If ATOM falls in value the collateral is liquidated and used to back the loan.
The total amount of USK that can be minted is only $1m, and the market cap of ATOM is more than $2.5b.
This minimizes the RISK of USK depegging.
So up to this point, Kujira launched FIN where you can trade your tokens in a similar way to a Centralised Exchange and they launched their own Stablecoin. So it was finally time to relaunch ORCA.
The relaunch of ORCA:
ORCA was relaunched on Kujira and retail investors can finally bid on liquidations again. You can basically purchase the collateral from people who minted USK when they get liquidated.
But there was still a problem that KUJIRA had to address: The struggle for Liquidity
The initial Hype that Kujira had died off. This lead to low liquidity and low volume. Not enough people were using FIN and not enough people were minting USK.
This also means that there are no liquidations and people couldn’t use ORCA. It all comes down to liquidity, something that is very rare in a bear market. So how could Team Kujira solve this problem?
BOW will bring liquidity to the Ecosystem:
They announced the launch of their new liquidity Platform BOW. Bow launched a few days ago and is a massive success.
In just a few days more than $1.5m of liquidity has been acquired. Finally, enough liquidity for people to use FIN again.
Due to BOW People started to mint USK again. The circulating supply of USK increased by over 50%!
As people are taking out loans to mint USK they will get liquidated as well, which means there is volume and liquidity on ORCA again. People can finally start bidding on liquidations.
And this is how Kujira faced another challenge and was able to solve hard problems in an elegant manner.
But this is not the End of the Story, it is just the beginning.
