According to a blog post published on Monday, Kujira is getting ready to launch a stablecoin called USK. Kujira is a cryptocurrency project that started on the Terra Classic blockchain. It moved to layer 1 protocol Cosmos after Terra’s implosion.
Following the demise of Terra’s ecosystem, Kujira moved from the Terra blockchain to the layer 1 protocol Cosmos. The Kujira team announced in a blog post that the decentralized lending technology MakerDAO and its stablecoin DAI served as inspiration for the development of USK. Kujira built ORCA before Terra fell in order to offer high capital efficiency to Anchor liquidations.
The project team is confident in its solid and reliable stablecoin structure. That will increase the sustainability of $USK in the DeFi ecosystem. Furthermore, they said their algorithmic stablecoin will use the more robust language Rust despite using Solidity.
📢 Our biggest ever announcement to date 👇👇
Please read the Medium in detail as it's jam packed with all the info you need. Welcome to the start of something beautiful 🐋💙$KUJI
— Kujira (@TeamKujira) August 8, 2022
The announcement stated: “We thought that if we were able to build our own native stablecoin, we would have much more flexibility for future integrations. We plan to focus on payments and commerce and build our own high-quality Kujira wallet. From the ashes of Terra Classic’s collapse, we rebuilt Kujira. We are committed to pursuing transparency, community engagement, and sustainable governance. Also, we are focusing on adoption and real value. Because we are aware of how important it is to manage stablecoins appropriately. ”
On Wednesday, August 10, 2022, $USK and ORCA entered TestNet. It will undergo testing and quality assurance with the goal of going live in about two weeks. In order to ensure maximum stability, loan LTV will be set at a good, safe level and modified as the system expands.
Mechanism of $USK
In recent months, many stablecoins are struggling to maintain their pricing due to the deleveraging and insolvency experienced by cryptocurrency exchanges and blockchain companies. In order to fight rising inflation, central banks around the world have been raising interest rates. Therefore, that has reduced liquidity and pushed investors away from riskier investments like cryptocurrencies.
According to the statement, Kujira has designed USK to ensure its price stability using a combination of overcollateralization and trading incentives. As opposed to a hard peg to $1, the stablecoin will be “soft-pegged” to the US dollar, allowing the exchange rate to fluctuate within a range.
The treasury of the stablecoin issuer would hold more digital assets in value than the stablecoin’s market capitalization if USK were to be overcollateralized by crypto assets, similar to DAI. The team hopes to integrate KUJI, the token produced by Kujira, in the near future. The supporting asset would first be Cosmos’ native token ATOM, according to the post.
The only way to mint (create) USK tokens is to use a cryptocurrency like ATOM as collateral to borrow USK for 5% interest and a 0.5% minting fee. Holders of KUJI tokens will get the USK fees earned. The interest rate and cost are flexible, according to the post.
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