On Thursday, May 2nd, Dr Makoto Takemiya and SORA contributors Victoria, Stefan, and William held a session in which they answered community-submitted questions and demonstrated the Kensetsu platform.
With the Kensetsu platform currently available on the Polkaswap testnet, SORA contributors took to the Polkaswap announcements channel to answer pressing questions from the community about the upcoming feature. Here is a transcript of the session and a recording of the demo.
The questions and answers have been edited for clarity.
Welcome to today’s AMA session, where we will dive deep into Kensetsu. I’m Victoria, your host, and I will guide you through an insightful discussion about “MakerDAO” of the SORA ecosystem.
We have prepared an exciting lineup for you, featuring live demonstrations, insightful discussions, and expert perspectives from our special guests: Stefan, Polkaswap Lead and SORA contributor; Makoto, CEO of Soramitsu and SORA contributor; and William, сontributor to the SORA ecosystem.
Whether you’re familiar with Kensetsu or have heard about it for the first time, this session is designed to enhance your understanding and spark your interest in the possibilities it presents within the SORA ecosystem. Let’s get started!
Stefan: I’m Stefan, the main contributor of Polkaswap. My mission is simple yet powerful: to co-create with our community the very best decentralized exchange experience. Together, we’re forging new frontiers in technology and usability, making Polkaswap a legendary DEX across other exchanges 💱
My journey in the world of decentralization is not just confined to the professional arena; it’s a passion that exceeds my work hours. I conduct this enthusiasm in personal and university-based research, exploring the frontiers of decentralized technologies and their profound impact on the future landscape.
Makoto: Hi. My name is Makoto Takemiya and I got into blockchain in 2013, starting with Bitcoin. I am an engineer and after being in the Bitcoin community for awhile, I joined NEM as one of the original 5 developers and proposed their consensus algorithm, Proof-of-Importance.
From there, I became interested in the enterprise blockchain space and started my company, SORAMITSU, in 2016, focusing on contributing to the open source, Hyperledger Iroha blockchain. We used Iroha to build the world’s first retail CBDC solution launched using real money in the world, in 2019, in Cambodia, working with their central bank.
In 2017, I decided to return to my crypto roots and contribute to the open source SORA project, which we have been doing ever since.
I graduated with my PhD in Interdisciplinary Information Studies from the University of Tokyo.
William: Hello everyone, I’m catswithouthats, also known as Willliam, and I am a contributor to the SORA ecosystem. My responsibilities include inviting people to join the trade chat and supporting education initiatives in the community as well as supporting SORA governance!
For those who don’t know much about Kensetsu. What is Kensetsu?
M: Kensetsu is a next-generation MakerDAO-style dApp on the SORA network. I say next-generation, because it uses Polkadot tech to do things that are not possible or easy to do on Ethereum. Like MakerDAO, it is used to create coins that are pegged to an index of value using other tokens as collateral — in other words, it is a platform for creating completely on-chain, decentralized stable coins.
Demo
Since Kensetsu is currently on testnet, it would be great to actually show the listeners how it really works!! Stefan, could you kindly showcase how to start with Kensetsu on Polkaswap?
The demo has been edited for clarity.
What is the main difference between Kensetsu and MakerDAO, and how is it expected to impact the financial ecosystem?
MT: Kensetsu has two vault types unlike MakerDAO. One is similar to MakerDAO where a stabilization fee is paid upon redemption. The other allows for a taxation over time without requiring extra payment upon redemption. This flexibility, facilitated by Polkadot technology, enables automatic execution of contracts, which is challenging on Ethereum. It can potentially impact the financial ecosystem by integrating with Polkaswap and other platforms, offering more flexibility and new stable coin indices.
What is the long-term vision for the development and evolution of Kensetsu in the context of decentralized finance and the SORA ecosystem?
MT: The long-term vision for Kensetsu is to create a highly flexible system that can add new types of collateral and stable coin indices through governance. This would enable the creation of new stablecoins that can be tailored to various needs and include different collateral types and stability fees.
Will builders be able to choose between getting paid in KUSD or XOR?
MT: Yes, builders will eventually have the option to get paid in KUSD, XOR, or both, transitioning to this system over time. This approach aims to drive more usage within the Kensetsu ecosystem and create more XOR tokens as needed for the economy.
How do you plan to incentivize liquidity for Kensetsu KEN stablecoins, and what is the role of KEN tokens in this process?
MT: Liquidity for Kensetsu KEN stablecoins will be incentivized through a farming token called KEN. A tax from minting Kensetsu assets will buy back and burn KEN tokens on Polkaswap, with 80% of the burned KEN reminted and sent to Demeter Farm to incentivize liquidity.
What role does Polkadot play in implementing and operating Kensetsu within the SORA ecosystem?
W: Polkadot enables the SORA network to implement systems like Kensetsu effectively, thanks to its technology that supports flexible governance and integration capabilities.
What can cause KUSD to depeg, and is there a mechanism to prevent it from happening?
MT: KUSD depegging is unlikely due to overcollateralization and stability mechanisms like taxes on vaults and buyback programs. These features help maintain the peg even in adverse market conditions.
Is there any limit to the synthetic assets that can be created using Kensetsu? How do we ensure the synthetic asset price follows the real asset price?
W: The limit to creating synthetic assets in Kensetsu is tied to the amount of collateral one can provide. Price stability is ensured by partnering with Band Protocol, which provides asset price feeds necessary for maintaining accurate pricing of synthetic assets.
Will the overcollateralized commodities like KAU (KEN Gold) and KAG (KEN Silver) be 1:1 redeemable with physical Au & Ag?
W: No, these overcollateralized commodities are not backed by physical gold or silver. They are on-chain assets pegged to real-world asset price indices, and there is no physical vault storing these commodities for backing the on-chain versions.
Kensetsu is currently on the Polkaswap testnet, try it out and provide your feedback in the SORA or Polkaswap Telegram channels. Look out for more information about the Kensetsu platform and its tokenomics ahead of the mainnet release!
About Polkaswap
Polkaswap is a next-generation, cross-chain liquidity aggregator and hybrid AMM and order book DEX on the Polkadot (and Kusama) network(s), parachains, and blockchains connected via bridges. Through the development of bridge technologies, Polkaswap enables Ethereum-based tokens to be traded. This is done seamlessly, at high speed and low fees, while exchanging assets in a non-custodial manner on the SORA network.
Polkaswap utilises liquidity aggregation technology to trade against multiple sources, promising to solve critical problems AMM DEXs face, such as impermanent loss and pair fragmentation. As an open-source project, it allows the community to add more liquidity sources, enhancing its potential. Polkaswap is the first cross-chain, fully decentralised exchange interoperable via bridges with Polkadot, Kusama, and Ethereum, with Bitcoin and various EVM-based ecosystems coming soon.
