Home · Blog · DeFi & Trading · · Updated Nov 26, 2025 · 5 min read
How XOR, VAL, and PSWAP Power the SORA Ecosystem
Discover how XOR, VAL, and PSWAP drive SORA’s economy, governance, and liquidity — and how they extend into SORA v3 (Nexus) on Hyperledger Iroha 3.
TL;DR
SORA’s economy runs on three interconnected tokens: XOR as the monetary base, VAL for governance, and PSWAP for liquidity rewards across Polkaswap and Kensetsu.
Together they coordinate currency, governance, and market activity that sustain DeFi on SORA and cross-chain platforms like TONSWAP.
These mechanisms are now evolving under SORA v3 (SORA Nexus) — a new hub chain built on Hyperledger Iroha 3 and tested on the Fujiwara network.
Understanding SORA’s Token Framework
SORA is more than a blockchain — it’s a coordinated, algorithmic economy designed to manage liquidity, governance, and value creation without central control. For a broader ecosystem overview, see “SORA Ecosystem Explained”.
| Token | Role | Core Function |
|---|---|---|
| XOR | Economic Base | Currency, liquidity reserve, and KUSD collateral |
| VAL | Governance | Voting, validator staking, and treasury management |
| PSWAP | Market Incentive | Liquidity and trading rewards on DEXs |
These tokens underpin SORA’s three-layer design — economic, governance, and market — extending across Polkaswap, Kensetsu, and TONSWAP.
1. XOR — The Economic Engine
XOR is SORA’s native currency and foundation for all network liquidity and stability.
Key Roles
- Currency & Settlement: Used for transactions, liquidity, and cross-chain swaps.
- Bonding Curve Supply Control: The token’s supply expands or contracts algorithmically to match demand.
- Collateral: Locked in Kensetsu vaults to mint KUSD (Kensetsu USD), SORA’s stablecoin used as a base pair on Polkaswap and TONSWAP.
Bonding Curve Overview
SORA’s token bonding curve (TBC) dynamically adjusts XOR’s price and supply based on real demand. For a detailed curve walkthrough, see “SORA’s Token Bonding Curve Explained”.
- Buy Function: Purchasing XOR mints new tokens, adding reserves (like DAI or KUSD) to the treasury and raising price incrementally.
- Sell Function: Selling XOR burns tokens and releases reserves, with a small spread acting as a stabilizer.
This algorithmic model acts as SORA’s monetary policy engine, ensuring elastic liquidity and market equilibrium without centralized control.
| Feature | Description |
|---|---|
| Token Type | Native currency |
| Supply Model | Elastic via bonding curve |
| Collateral Use | Minting KUSD through Kensetsu |
| Interoperability | Connects Polkaswap, TONSWAP, and other chains |
2. VAL — Governance and Coordination
VAL powers SORA’s on-chain governance under the Governance V1 model.
Governance Structure
- Council: Oversees strategic proposals and project direction.
- Technical Committee: Fast-tracks urgent or technical changes.
- Parliament: VAL holders vote on referenda, treasury spending, and upgrades.
Core Uses
- Voting & Referenda: Define network rules and allocate treasury funds.
- Validator Staking: Supports consensus and network integrity.
- Ecosystem Growth: Directs funding toward innovation and community projects.
As SORA transitions to v3 (Nexus), governance is expected to evolve into a more modular Parliament-style model on Hyperledger Iroha 3, maintaining transparency and decentralization.
3. PSWAP — Liquidity and Market Efficiency
PSWAP fuels liquidity across Polkaswap, Kensetsu, and TONSWAP. For more context on DEX design and trading, see “Best Decentralized Exchanges (DEXs)”.
Key Roles
- Liquidity Rewards: Incentivizes liquidity providers across pools.
- Deflationary Design: Trading fees fund PSWAP buy-and-burn mechanics.
- Cross-Chain Utility: Connects liquidity between XOR, KUSD, and bridged assets.
- TONSWAP Integration: Aligns with cross-chain liquidity expansion on TON.
| Feature | Description |
|---|---|
| Token Type | DEX incentive token |
| Emission | Decreasing with periodic burns |
| Utility | Liquidity rewards and cross-chain incentives |
4. Token Synergy — How They Work Together
| Layer | Token | Function |
|---|---|---|
| Economic | XOR | Base currency, collateral, and liquidity |
| Governance | VAL | Network voting and treasury management |
| Market | PSWAP | Incentives for liquidity and trading |
Example Flow:
- Users trade assets on Polkaswap using XOR or KUSD.
- Liquidity providers earn PSWAP rewards.
- VAL holders govern reward rates and protocol updates.
- XOR’s bonding curve dynamically adjusts supply to meet demand.
This self-regulating loop coordinates liquidity, governance, and incentives across SORA’s DeFi layers.
5. Real-World Applications
- Cross-Border Payments: Low-fee, real-time global transactions.
- Stable Value: KUSD provides pegged liquidity for DeFi.
- Community Governance: VAL holders guide funding and upgrades.
- Adaptive Supply: XOR’s curve aligns token supply with demand.
- Cross-Chain Liquidity: PSWAP unites SORA with TON and other networks.
With SORA v3 (SORA Nexus) advancing on Hyperledger Iroha 3 and validated on Fujiwara, these token mechanisms are expected to extend across Polkadot, TON, and Ethereum — combining deterministic finality with modular governance.
FAQs
What gives XOR its value?
XOR’s value is derived from its use in transactions, DeFi activity, and as KUSD collateral — all backed by its bonding curve mechanism that balances supply and demand.
How are VAL and PSWAP different?
VAL governs network decisions and treasury; PSWAP rewards liquidity and trading activity.
What connects XOR and KUSD?
Users lock XOR into Kensetsu vaults to mint KUSD, a USD-pegged stablecoin for trading and DeFi.
How does SORA control inflation?
Through PSWAP burns funded by fees, VAL oversight of treasury spending, and XOR’s demand-based minting via the bonding curve.
How do XOR, VAL, and PSWAP interact with Kensetsu?
XOR provides vault collateral, VAL influences Kensetsu parameters through governance, and PSWAP incentivizes liquidity in KUSD/XOR pools.
When will SORA v3 launch?
SORA v3 (Nexus) is in active development on the Fujiwara testnet. No fixed launch date has been set — deployment depends on technical and governance milestones.
Further Reading
- Internal articles
- “SORA Ecosystem Explained” — high-level view of SORA’s economics, governance, and products.
- “SORA’s Token Bonding Curve Explained” — in-depth look at the bonding curve model behind XOR.
- “Best Decentralized Exchanges (DEXs)” — context for how Polkaswap and other DEXs fit into DeFi.
- External references
- SORA Wiki — official knowledge base for the SORA ecosystem.
- Hyperledger Iroha documentation — technical background for Iroha 3 and related components.
Conclusion
XOR, VAL, and PSWAP form the backbone of SORA’s decentralized economy — liquidity, governance, and stability unified through algorithmic design.
As SORA v3 (Nexus) progresses on Hyperledger Iroha 3, these tokens remain central to linking networks and building a transparent, scalable, and interoperable financial future.