Kusama Parachain Slot Auction has attracted much attention recently from those projects looking to dive deeper into the Polkadot ecosystem. As the pioneer network of Acala, Karura participated in the slot auction of Kusama, raised more than 500,000 Kusama (KSM) tokens from its community, and became the first parachain of Kusama (Polkadot Ecosystem).
Providing a set of applications optimized for fast and innovative DeFi on top of the Kusama blockchain, Karura will inherit the Kusama network's validators to secure their network by plugging in Karura’s parachain. This plug-and-play security is a major aspect for Karura as they didn’t have to, as a parachain team, go out to recruit a whole set of validator nodes with huge extra costs to secure their blockchain. With its world premiere listing on KuCoin on July 20, 2021, it is well worth looking into today.
What is Karura?
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 and Acala are often called “Sister” or “Cousin” networks, as Karura is building the DeFi hub for the Kusama community while Acala is building the DeFi hub of Polkadot. In perpetuity, these networks will be running in parallel, similar to the different branches opened in different countries to meet the localized demands.
Although Karura is Acala's pioneering network, the networks they deploy vary with separate ambitions.
Karura targets to be an innovation test ground for decentralized finance and NFT, with the following advantages:
- To own the latest technology stack and iterates quickly;
- To service the Kusama cultural innovation community;
- To continue to innovate products, such as NFT, collectibles & collateral, etc.
Acala aims to become a new global financial infrastructure by providing financial infrastructure API and other aspects of docking work based on legal compliance while bringing innovative financial products on the blockchain to ordinary users. Acala has the following advantages:
- Enterprise-level security and stability;
- Conservative and stable governance, risk control, and upgrade;
- High-quality assets and collateral;
- An enterprise-level, globalized partner.
In general, Karura and Acala complement each other and jointly build the financial foundation for the Polkadot ecosystem.
How Does Karura Work?
With the commitment to build a one-stop Kusama DeFi center, Karura provides users with a series of out-of-the-box financial applications, including trust-free on-chain staking liquidity products (LKSM), multi-collateralized cross-chain stablecoin kUSD, and a DEX based on the automatic market maker mechanism. These functions require little gas fees, and to the best convenience for the users, any tokens within the platform can be used for its payment.
Karura also launched a sustainable token economic model, on-chain treasury, and the Decentralized Sovereign Wealth Fund (dSWF) to promote the sustainable development of communities and networks. Karura also features a strong technical infrastructure and adopts the brand new Acala EVM, which is compatible with Ethereum without losing the functionality of Substrate. Therefore, Karura is ready to prepare and provide development support for leading DeFi projects.
Who Created Karura?
The founding team of Karura has very strong experience in engineering and product.
Ruitao Su, the Co-founder & CEO of Karura, is also the current CEO of Laminar Protocol. He is an award-winning software engineer, entrepreneur, investor, and advisor to tech companies and startups.
Fuyao Jiang is the Co-founder of Karura, as well as the Founder of Polkawallet.
Bette Chen is the Co-founder & COO of Karura and also the COO at Laminar. She is an experienced product manager and entrepreneur with a 10-year of product management experience in the fields of software and high technologies.
Bryan Chen is the CTO of Karura. As one of the best Substrate developers, he also started and led the Substrate Developer Academy globally to help grow more substrate developers worldwide.
The project is funded by some of the top names in crypto, including Pantera, Polychain, Coinbase, Arrington XRP Capital, and Digital Currency Group that owns Grayscale and Coindesk.
What is KAR Token?
Karura (KAR) tokens have a fixed amount of supply, and a certain amount of Acala (ACA) tokens are reserved for backing the value of KAR. The KAR token has a diversified utilization across the Karura ecosystem, including transaction fees, node incentivization, community governance, algorithmic risk adjustment, pallet deployment, and smart contract deployment.
Despite that, Karura network users get to pay the transaction fee with any tokens available in their wallets. Actually, the token will be swapped in the Karura DEX for the KAR token at the network backend. In addition, the founding team has allocated the majority of token distribution for community governance.
- Early Backers 18.33%
- Backers 10.08%
- Founding Team 10%
- Community 60.87%
- Auction Reward & Liquidity Program 34%
- Ecosystem Development 5%
- Treasury/Reserve 11.62%
- Reward Reserve 10.25%
Both the Karura and Acala blockchain are built to meet the various demands in the Kusama and Polkadot ecosystem, by providing DeFi hub services for the two decentralized communities. Built on top of the foundation layer of Kusama blockchain, Karura will be able to easily use and integrate the existing Kusama ecosystem for its future upgrade such as using its substrate framework to customize its blockchain for DeFi, leveraging the validator nodes to secure their blockchain by plugging in Karura’s parachain, deploying the existing on-chain console for governance, as well as being able to self-upgrade the blockchain for Karura without having a hard fork.
By winning the first-ever Parachain Slot Auction in the Kusama ecosystem with over 500,000 KSM contributed in the community-backed crowd loan, Karura network has been officially live on the Kusama network while rewarding its supporters with KAR tokens and starting its rollout plan for the next stage.
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