Karura is the DeFi Hub of Kusama
As Karura’s Parachain Auction event draws near, we want to empower the community with the resources it needs to fully understand the scope and vision of Karura, the DeFi Hub of Kusama and sister network of Acala. With a community-driven approach to the launch and a passionate ecosystem for development, we believe Karura will pave the way for a new era of DeFi on Kusama.
TLDR: Become an early supporter of Karura’s launch on Kusama by participating in the Karura Crowdloan. For every KSM locked in the crowdloan, participants will receive 12 or more KAR, the native token of Karura, which will be minted at launch with a fixed total supply of 100,000,000 and a community-first distribution model. Karura’s intended parachain slot length on Kusama is 48 weeks (eight 6-week slots in total). At the end of the 48 week slot, all original KSM contributed to the crowdloan will be automatically released back to contributors.
Read on for more on our approach to launching in-step with the community, and review the Karura parachain auction parameters and Karura Launch and Governance roadmap.
Though nearly identical in codebase, Kusuma and Polkadot are distinctly different communities, both with substantial demand for DeFi products and stable assets.
With a current market cap value of $3.71 billion and 900+ validators, Kusama has attracted a thriving ecosystem of developers who can reliably secure their networks and build fast (especially since its infrastructure can be upgraded on-chain without forking). Not only that, but Kusama offers the opportunity to scale with high-capacity processing speeds exceeding 166,000 transactions per second along with interoperability between multiple parachains, ultimately bridged to Polkadot.
This all makes for an exciting development environment — and the perfect place for the Acala team to fine-tune its mission with Karura and prepare for the future deployment of Acala on Polkadot.
Just as Acala will serve as the de-facto DeFi hub of Polkadot, Karura will serve as the de-facto DeFi hub of Kusama.
With these two sister networks in place, DeFi innovation will no longer be limited by high-transaction fees and network isolation. Rather, Acala and Karura will help usher in a new era of DeFi, by powering a suite of financial applications while granting composability between two unique ecosystems of parachains, protocols, and dapps.
Like Acala, the Karura network will be a one-stop shop for decentralized financial tools, which include 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.
But in order to launch, Karura must first secure a parachain slot on Kusama by winning an auction. This process requires adequate funding to strategically bid in the network’s candle auction. Though some projects may rely on large investors to acquire this funding, the Karara team is approaching things differently. Karura is using the crowdloan to bootstrap KSM from the community to use these funds as the bid in the parachain auction. All contributors to the crowdloan will receive Karura’s native token, KAR, in a ratio to their KSM contribution.
Medium: Karura’s Approach to the Upcoming Crowdloan and Parachain Auction on Kusama Karura, the sister network to Acala and DeFi hub of Kusama, will soon begin its Crowdloan to garner community support…
For more information on the Crowdloan and Parachain auction process, you can also check out this 8-minute explainer video:
When designing the token economy for Karura, the team sought out to align incentives and bootstrap the project for the benefit of its community. After all, Karura and Acala have 90,000+ members, along with an Ambassador program, that will serve as the backbone of the project.
In order to ensure that these communities have day-one access to Karura’s DeFi tools, along with the opportunity to earn rewards while supporting the network’s launch, the team has opted to crowdsource the funding for the Kusama Parachain Auction and to reward community participants with Karura’s native token (KAR).
Only KSM holders can participate in the Crowdloan event, and the KSM must be unbonded and transferrable in a crowdloan-compatible wallet like Polkawallet or Polkadot.js.
Kusama will enable the Crowdloan module, a permissionless smart contract for our community to temporarily lock their KSM in support of Karura’s upcoming bid for a parachain slot. The module will receive KSM and lock these assets for a period of 48 weeks, after which participating users will automatically receive their full contribution back.
For their support, participants will receive Karura’s native token KAR.
For each 1 KSM locked, a participant will be rewarded with a minimum of 12 KAR. Though, the reward could be higher. It all depends on the amount of support Karura receives.
Once Karura launches, any community member who had locked their KSM during the Crowdloan campaign will receive their reward in KAR. Upon receipt, 30% of this KAR will be unlocked, liquid, and available to utilize within Karura’s DeFi ecosystem, while the remaining 70% will be vested and released gradually until the end of the 48-week lease period.
Savvy community members can also take advantage of our referral program to earn additional KAR rewards. For each successful referral to the Crowdloan module, we’ll send 5% additional bonus KAR to you and a friend.
At genesis, the total supply of Karura’s native token will be 100,000,000 KAR, an amount that’s fixed and deflationary — a different approach from the many projects that rely on inflation mechanisms for sustainability. We’re confident in the security and scalability provided by Kusama’s relay chain, and have designed Karura’s total supply and token economics to ensure the project’s long-term success.
Karura is built with decentralization at heart. 60.87% of KAR has been committed to the community, ecosystem and network operation through the “Auction Reward/Liquidity Program,” “Treasury/Reserve,” and “Ecosystem Program.”
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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 staking derivatives, 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, and today has received five Web3 Foundation grants, has backing from Coinbase Ventures, Pantera Capital, Polychain Capital, Hypersphere and other top firms, and has a distributed team in New Zealand, China, Europe, Brazil, and the United States.
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.