Karura token holders vote to enable the Karura Dollar (kUSD), the first stablecoin on Kusama | KAR liquidity program imminent

Karura’s stablecoin minting is enabled, along with the new KSM/kUSD liquidity pair, and KAR liquidity mining rewards.

Published in

Karura

7 min readDec 15, 2021

TL/DR: The Karura community has passed a vote to enable a network upgrade that enables minting of the Karura Dollar (kUSD), enables the KSM/kUSD pair on Karura Swap, and enables the liquidity provider KAR rewards program. LPs for KSM/KAR can now begin earning liquidity mining rewards, and KSM/kUSD liquidity mining starts immediately following the KSM/kUSD Bootstrap period.

Karura is now well into launch mode, and the KAR network owners have just passed a vote to enable another major network upgrade. Now in Phase 3 in the Karura launch roadmap, this upgrade has enabled kUSD stablecoin minting, kicked off the Bootstrap period for the new KSM/kUSD pool, and enabled the first liquidity provider rewards in the Karura Apps. Get started and issue your own kUSD loan on the Karura Apps. If you’re new to Karura, you’ll need to do a few setup steps first. This guide will help you onboard.

Prior to today’s upgrade, Karura has enabled several other features, including the KSM/KAR pair on Karura Swap and liquidity providing (LP) for the KSM/KAR pair. Users can also use Karura Apps to transfer KSM cross-chain from Kusama to Karura for use within Karura’s DeFi hub. Here are the stats for the network as of today with just 1 pair being enabled prior to today’s kUSD launch:

Total Value Locked: $7.123M
24-hour Total trading volume (USD): $1.14M
Daily Active Users: ~532
Active KAR accounts: 58,240

24-hour Karura stats as of August 5, 2021:

Mint Karura Dollar (kUSD) to use in DeFi on Karura

As more users turn to crypto assets for their financial needs, it has become imperative to provide price-stable currencies to better enable the mainstream adoption of DeFi use cases such as payments, loans, and more. Users often need to rely on an asset’s stability to: execute low-cost value transfer, assess the risk of lending strategies, and to ensure that their transition to and from a digital financial environment is as approachable as it is predictable.

The Karura Dollar (kUSD), is a decentralized, multi-collateralized stablecoin backed by cross-chain assets. Stable by design, and pegged to the U.S dollar, kUSD is now on its way to being the de facto stablecoin of Karura and Kusama.

With the Karura Dollar Stablecoin protocol, anyone can create a Vault in kUSD by locking valuable cross-chain crypto assets, including KSM as collateral. While the user maintains the Vault by paying interest, the protocol works to maintain kUSD’s stability while automatically managing the risk from any price fluctuations of the underlying collateral asset. In fact, the stablecoin’s liquidation process is jointly supported by Karura Swap, the network’s AMM decentralized exchange, and auctions to achieve the best price optimization and efficiency.

With today’s network upgrade, anyone can now create their first Vault using KSM as collateral. Go to the Karura Apps to mint here: apps.karura.network/loan.

Join the LP Bootstrap for the KSM/kUSD pair

Fair and Accurate Pools with “Bootstrap”

One novel feature of Karura Swap is the ability to launch a trading pair in “Bootstrap” mode, a brief warm-up period that encourages a pool to achieve adequate liquidity while working to prevent frontrunning and market manipulation. With “Bootstrap,” Karura aims to empower trustless trading at a fair market rate.

On Karura, any given trading pair can be launched in the optional Bootstrap mode, which then invites users to secure a share of the pool and provide liquidity via one token, or with both tokens in the trading pair. During bootstrap mode, trading is temporarily disabled for a specific time period until the predetermined liquidity requirements are met. Once the bootstrap period is complete, the exchange rate is made public and trading is enabled on Karura Swap.

Enabling Bootstrap for KSM/kUSD

The Bootstrap for the first stablecoin pair, KSM/kUSD, is now live. With this unique feature, LPs will contribute liquidity, working toward successfully reaching liquidity goals while allowing time for the market to determine an accurate exchange rate.

Here’s how it will work:

The liquidity requirements are set to either 1000 KSM or 10,000 kUSD.
Users are invited to contribute liquidity for KSM only, kUSD only, or a combination of both KSM and kUSD.
At the time of contribution, liquidity providers are allocated a number of LP tokens, and indicative LP shares of the pool, which automatically adjust as more liquidity is added.
During the entirety of the Bootstrap period, no KSM/kUSD trading will be allowed. This ensures that the exchange rate is accurately consolidated.

Become an LP for the KSM/kUSD pair by contributing to the liquidity pool during its Bootstrap phase: : https://apps.karura.network/swap/bootstrap

Join the Harvest on Kusama — Liquidity Mining is Live

The most recent upgrade to Karura also includes the liquidity provider rewards program. Liquidity programs help to bring better liquidity, which leads to a better trading experiencer (lower slippage), and more trading fee rewards for Liquidity Providers (LPs). This, in turn, leads to better liquidity within the Karura network, including better stability support for the Karura Dollar (kUSD), more stablecoin minting, and more surplus share for kUSD LPs. All in all, these network dynamics will set a solid foundation for a long-term sustainably built community.

The liquidity provider rewards will begin with two primary pairs, KSM/kUSD and KSM/KAR. The KSM/kUSD pool rewards are as follows:

KSM/KAR was the first pair listed on Karura Swap. All LPs who had previously provided liquidity to this pair will receive retroactive rewards, in addition to an ongoing 12 month liquidity mining program. The details are the following:

Keep an eye out for what’s next in Karura’s launch

The next major milestones in Karura’s launch process are as follows:

Liquidity provider rewards via LP token staking will be enabled for KSM/kUSD after the pair’s Bootstrap period ends.
Karura is also bringing Liquid KSM to market very soon. LKSM Lite, the initial beta version of LKSM, is being developed and we expect to launch it in the very near future.
We are finalizing the work on our first BTC and ETH bridges. These bridges will also begin to launch soon, bringing highly liquid wrapped assets to Karura to be used as collateral and in trading pairs.
Follow the full Karura launch roadmap here.

Get started and issue your own kUSD loan or become a liquidity provider on the Karura Apps. If you’re new to Karura, you’ll need to do a few setup steps first. This guide will help you get started.

Want to learn more about Karura’s all-in-one DeFi hub?

Join the community on Discord! Meet fellow DeFi and Web3 enthusiasts, and attend weekly calls for a live team update on Karura’s launch progress.

About Karura

Karura is the all-in-one DeFi hub of Kusama. Founded by the Acala Foundation, Karura is a scalable, EVM-compatible network optimized for DeFi. The platform offers a suite of financial applications including: a trustless staking derivative (liquid KSM), a multi-collateralized stablecoin backed by cross-chain assets (kUSD), and an AMM DEX — all with micro gas fees that can be paid in any token. Karura is a blockchain platform custom-built for DeFi and powered by KAR, which enables settlement for transactions and smart contract execution, incentivizes node operators, and empowers its holders to participate in governance.

About Acala

Acala is an all-in-one decentralized finance network offering a blockchain platform secured by Polkadot, as well as a suite of cross-chain financial applications that let users trade, issue self-serviced loans, become liquidity providers, access trustless staking derivatives (liquid DOT — LDOT), and earn high-interest APY on their digital assets. The network is scalable, Ethereum-compatible, and optimized for DeFi.

Acala was founded in Oct 2019, has received several Web3 Foundation grants, has backing from Coinbase Ventures, Pantera Capital, Polychain Capital, Digital Currency Group, Arrington XRP Capital, and other top firms, and has a distributed team in New Zealand, China, Europe, Brazil, and the United States. As an open platform, Acala enables finance-oriented dApps to deploy for using smart contracts or built-in protocols with out-of-box cross-chain capabilities, security, and financial optimizations.