Karura, the sister network to Acala and DeFi hub of Kusama, will soon begin its PLO to garner community support for the first Kusama parachain auction
Karura, built as a sister network to Acala with virtually the same code, is a new blockchain network dedicated to serving the Kusama community as its primary decentralized finance (DeFi) hub. Karura’s cross-chain DeFi hub will provide a stablecoin (kUSD), staking liquidity for KSM called L-KSM, DEX capabilities, borrowing, lending, among other applications.
Any chain, like Karura, planning to connect to Kusama’s ‘layer zero’ multi-chain network for interoperability and plug-and-play security is referred to as a parachain. Kusama plans to have 100+ parachain slots available in the future, but the network is still in its early stages. Hence, the network, built by Polkadot Founder, Dr. Gavin Wood, is starting with a very limited number of available parachain slots. In order to gain access to a parachain slot, any hopeful team must participate in and win a candle auction using Kusama’s native token, KSM, which is subsequently locked for the duration of the parachain’s lease.
Karura plans to participate in the first Parachain Lease Offering (PLO) on Kusama. Parachain auctions can be approached in many different ways, and we’ll take a minute below to explain Karura’s approach. Those who would like a deep dive on the process for obtaining a parachain slot on Kusama or it’s ‘cousin network’ Polkadot should read the Polkadot blog’s detailed overview.
Karura is Acala’s sister network, focused on bringing DeFi to Kusama just as Acala is bringing DeFi to Polkadot. The origins of the name Karura comes from a divine creature in Japanese, stemming from a race of birds in Hinduism. According to Japanese mythology, the karura is said to be an enormous, fire-breathing bird, which fit perfectly with the Karura network’s bold and powerful intentions. Representing the Karura brand is a Phoenix, a fiery bird that shows its resilience through continual rebirth and reinvention.
The future will be determined by the open source community of builders, paving the way for new use cases and applications on Karura and Acala. Karura will begin with many ready-to-use applications, and since Karura is a ‘layer 1’ platform, many developers will also deploy Apps on top of Karura’s infrastructure. Karura will begin its life on Kusama with the apps and use cases outlined in this previous blog post below. You can also try it now on Karura and Acala’s testnet, called Mandala. Also, check out the full overview of Karura’s benefits to users in a recent blog post:
Karura will be the decentralized financial hub of Kusama and plans to be one of the first parachains to launch on the…
Karura plans to bid for the first parachain slot on Kusama and be the pioneer in the new crowdsourced network security paradigm: the Parachain Lease Offering (PLO) and Paradrop. Karura will run a trustless campaign for the Kusama community, in order to lobby for support from KSM holders. These supporters will bond their KSM on Kusama in support of Karura’s bid for a parachain lease in the Kusama parachain auction, and in turn, initiate the Paradrop.
KAR Paradrop : In return for KSM holders’ support, KAR (Karura’s native token) will be distributed to participants via the Paradrop. In the event Karura succeeds in its auction bid and secures a Kusama parachain lease, and network genesis of Karura occurs on Kusama, Karura will paradrop KAR to the accounts used to bond KSM in support of Karura’s Parachain Lease Offering auction bid. The Paradrop will be in effect over the duration of the lease via a vesting schedule, and the amount of KAR that a Karura supporter will receive will depend on the level of support by the Karura supporter. This means Karura supporters can utilise the KAR received to participate in governance and staking, while the vesting schedule is realised.
Bonding Periods: The KSM would be bonded, or ‘locked’, in the Kusama Relay Chain for the duration of Karura’s parachain lease. This means all KSM support is locked on Kusama to support the project’s parachain auction bid. Winning this auction then allows the project to access Kusama’s plug-and-play Proof of Stake security, but all KSM are inaccessible to the project team.
Kusama community participants will have the option to lock their tokens on Kusama for a period of time (6, 12 or 24 months TBD). The Karura team will take the Kusama community’s preferences into account when deciding on the duration of the parachain lease to bid for. Be on the lookout for a registration form in the coming days where we’ll begin gauging the community’s preferences on these decisions.
KAR Paradrop Amounts are Unpredictable: The exact level of support that Karura will require to emerge as the winning bidder amongst other competing bidders is unknown, and the duration of the parachain lease that Karura will bid for is presently undetermined. With this said, the exact amount of KAR that will be subject to Paradrop to Karura supporters in recognition of their support for the upcoming PLO will be unknown till the end of the auction. However, Karura will soon provide estimates for your reference. In a completely hypothetical example, a Karura supporter bonding X amount of KSM for Karura’s successful bid for a 6-months parachain lease would be recognized by a Paradrop of 5 KAR for her support; the same amount of KSM bonded in support of a successful bid for a 12-month parachain lease would be recognised with a Paradrop of 10 KAR given the extended duration of support.
An Actual ‘Fair’ Launch: KAR will be Paradropped to Karura supporters in recognition of their support for Karura’s Parachain Lease Offering (PLO) upon Karura network genesis on Kusama, but will be unlocked over time for transfer throughout the parachain lease period. However the full amount of the KAR Paradrop can be used for governance and other non-transfer functions to allow participation by Karura supporters in such functions from the outset of Paradrop to encourage participation and building of a strong and well-intentioned community from the ground up.
The Karura PLO is rapidly approaching. We will soon be launching the Karura PLO website, the PLO registration and preferences process, and rolling out more details as they come.
Karura is the decentralized financial hub of Kusama. The network is built as Acala’s sister network with nearly the same codebase — the two platforms enable a scalable, user-friendly, and fast cross-chain DeFi ecosystem for Kusama and Polkadot. Karura’s parachain is a fast-moving and powerful platform that enables efficient, inexpensive, and sophisticated financial applications, improving trading effectiveness and saving time. The platform offers a suite of financial primitives: a multi-collateralized stablecoin backed by cross-chain assets like Kusama and Bitcoin, a trustless staking derivative, and a decentralized exchange to unleash liquidity and power financial innovations.