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 (aUSD), and an AMM DEX – all with micro gas fees that can be paid in any token.
The Acala Foundation created Karura in September 2019 to be a Decentralized Finance (DeFi) hub and stablecoin platform for the Kusama network. Karura is intended to operate on Kusama as a parachain.
If you’re unfamiliar, Parachains are custom blockchains that feed into the main blockchain and heart of the Kusama network, called the Relay Chain. The Relay Chain is responsible for Kusama’s shared security, consensus and transaction settlements. By being integrated into the Relay Chain, parachains benefit from the Relay Chain’s base features.
The team has chosen to launch Karura (KAR) on Kusama in order to provide DeFi products to its community and is also releasing the Acala platform, a similar hub for Polkadot, later in 2021.
Karura’s native cryptocurrency, KAR, is expected to be airdropped to community members who use their KSM, Kusama’s cryptocurrency, to vote for the parachain to go live on Kusama in a process called a Parachain Auction.
KAR is the utility token that powers the DeFi hub of Kusama:
- Transaction Fees: Powers the micro gas fees and smart contract execution.
- Node Incentivisation: Incentivizes network nodes to monitor and relay messages to Kusama.
- Governance: Empowers the community to vote, elect council members, and drive the development of Karura.
- Algorithmic Risk Adjustment: Auto-adjusts risk parameters such as interest rates or collateral ratio.
- Pallet Deployment: Allows teams to deploy new Substrate pallets on the Karura blockchain by staking KAR.