Exploring SORA Kensetsu: A Genius DeFi Proposal on Polkaswap

Imagine having a big, strong box where you can safely keep your special toys. Now, think of SORA Kensetsu as that kind of box for digital money called tokens. SORA Kensetsu is like a smart system that helps people protect their tokens and even makes the whole SORA network stronger and more trusted.

This system works with Polkaswap—a place where people can trade different kinds of tokens without any trouble. The first part of this big plan includes a way for these locked-up tokens to be used wisely if their value changes too much.

And guess what? People who have XOR tokens get to make important decisions on how everything runs!

When someone offers their XOR in return for another token named KUSD on the Demeter farm, they get rewarded! All these steps help make sure there’s enough XOR and KUSD going around for everyone’s needs.

As time goes by, there’ll even be new ways to swap between stablecoins—tokens that don’t change value suddenly.

To start using all these cool features in the real world of blockchains (like an endless chain of digital toy blocks), builders need to follow some rules when making vaults filled with lots of coverage and keeping track of fees for creating KUSD.

Ready to know more about how this magical token-saving box works? Let’s take a closer look!

Key Takeaways

• SORA Kensetsu will start most likely in 2024 sometime and is like Maker DAO, with a focus on stablecoins that are super safe because they have more tokens backing them up than what’s borrowed.
• People who lock their XOR - KUSD in the liquidity pool can earn money from fees. XOR holders get to vote on big decisions for SORA.
• Later on, Phase 2 will let people trade between certain stablecoins to keep the economy strong and make less XOR available, which might help its value.
• To create KUSD, you can use TBCD instead of making new XOR tokens, keeping the number of XORs low and helping stability.
• Anyone interested should watch SORA Kensetsu as it could really change how we think about digital money.

What is SORA Kensetsu?

At the heart of SORA’s innovative ecosystem lies SORA Kensetsu, a dynamic platform designed to enhance the versatility and stability of digital currencies through strategic over-collateralization.

It represents a pivotal development within the realm of decentralized finance (DeFi), fundamentally aimed at fortifying economic security and user confidence on the network.

Phase 1: Token Locking and Liquidation on Polkaswap

Phase 1 is all about locking tokens and selling them if needed on Polkaswap. People who use SORA Kensetsu will put more tokens into a vault than what they take out as KUSD, which is a stablecoin.

This helps to keep things safe. If something goes wrong and the value of the locked tokens drops too much, these tokens get sold on Polkaswap to get KUSD back.

This way of doing things makes sure there are always enough funds to cover the KUSD people have. It’s like having insurance for your money! And it’s planned to be ready in 2024 sometime.

Remember, in this first phase, those who help by putting their XOR-KUSD into the liquidity pool at Demeter farm will earn part of the stability fees collected from these vaults.

XOR Token Governance

XOR token holders have the power to make big decisions for SORA Kensetsu. They vote on important changes. This makes sure everyone who owns XOR tokens can help steer where SORA is going.

It’s like having a say in how things are run, which is pretty cool.

There’s something else exciting coming up! There will be a time to propose new ideas for SORA Kensetsu. If you have XOR tokens, you could suggest ways to upgrade the system or make it better.

Your voice matters and can shape the future of SORA Kensetsu!

LP Incentives

After setting up how XOR token holders can govern, let’s talk about rewards for liquidity providers (LPs). If you stake your XOR-KUSD pairs in Demeter farm, you can get extra benefits.

This means when you help by adding your tokens to the pool, you not only make the market better but also earn special incentives. This is a big deal because it helps keep Polkaswap full of liquid funds so that trading stays smooth and easy.

Think of these incentives like a thank you for supporting Polkaswap. A part of the stability fees that are collected gets shared with LPs who stake their mix of XOR and KUSD. It’s there to motivate people to bring more liquidity into play.

The aim here is crystal clear: make sure there’s always enough cash or assets around to trade without hitches ensuring confidence in SORA economy keeps soaring higher!

Phase 2: Swaps to Approved Stablecoins

Phase 2 of SORA Kensetsu is exciting! It lets people trade between approved stablecoins. This part works a bit like the Peg Stability Module from Maker DAO, which many know about in the blockchain world.

By doing this, SORA aims to make its economy stronger and more reliable.

The plan is to use extra secure stablecoins that hold different tokens as safety. These include XOR, VAL, PSWAP, XST, XSTUSD, and TBCD. The big goal here is making less XOR available out there.

This helps people trust SORA’s money system even more.

How SORA Kensetsu Works

Delving into the intricacies of SORA Kensetsu reveals a robust mechanism, where an over-collateralized stablecoin model underpins a fascinating economic ecosystem—continue reading to uncover the seamless interplay that enables stability and fosters adoption within the SORA network.

Over-collateralized Stablecoins

Stablecoins in the SORA economy are built to be extra safe. Picture a vault where you put in more money than you take out as a loan; this is how over-collateralized stablecoins work.

You lock up assets like XOR, VAL, or other tokens and then mint KUSD. This means even if prices go wild, there’s enough stored away to cover the KUSD you borrowed.

The cool part about these stablecoins is they help make the SORA world stronger. By locking up more value than the KUSD debt, it reduces how much XOR is moving around out there. Less XOR floating around can lead to more trust in SORA’s money system because it won’t lose worth easily.

Plus, builders who use TBCD to create KUSD are cleverly avoiding making more XOR tokens – keeping things balanced.

Reduction of Circulating XOR Supply

Reducing the number of XOR tokens out there is a big part of SORA Kensetsu’s plan. By doing this, they hope to make people more confident in the SORA economy. Think about it like this – when there are fewer tokens moving around, each one can become more valuable.

That’s why some of your XOR gets locked up if you want to create KUSD, which is a new stablecoin on SORA.

Locking up these tokens means they aren’t just sitting in someone’s wallet—they’re helping keep everything balanced and steady. And because the system needs extra stuff put aside as insurance (that’s what over-collateralized means), even more XOR gets pulled out of circulation.

Next up, let’s see how using TBCD for minting KUSD fits into all this!

Use of TBCD for KUSD Minting

TBCD plays a key role in the SORA Kensetsu project. By using TBCD, builders can create KUSD, which is a stablecoin. This helps because it stops too many XOR tokens from being made.

It’s good for the SORA economy when we make fewer XORs.

Minting KUSD with TBCD also adds to the stability of our money system. People who hold SORA will like this because it makes our network stronger and more trustworthy. Investors looking at us can feel more sure about putting their money into our projects.

The Submission Requirement

Before diving into the mechanics of KUSD minting on SORA’s mainnet, it’s critical to understand the submission requirement that sets the stage for a seamless and stable experience.

This bedrock component outlines essential criteria and protocols that ensure every interaction with Kensetsu is consistent—balancing security needs with the fluidity users demand.

Phase 1 Features for KUSD Minting on Mainnet

Phase 1 is a big step for SORA. It introduces features that let you mint KUSD on the mainnet.

• You can lock up more tokens than needed in your own vault. This is called over - collateralization, and it helps keep things stable.
• If the value of your locked tokens falls below what you owe in KUSD, Polkaswap steps in. It sells off some of your tokens to make sure there’s enough money to cover the KUSD.
• XOR token owners are important. They get to vote on changes and make sure the system runs well.
• When you stake XOR - KUSD pair on Demeter Farm, you earn a cut of the stability fees.
• Developers work hard to pick out and set up the best functions for this first phase.
• To mint KUSD on Mainnet, follow these new Phase 1 features as rules.

Conclusion

SORA Kensetsu is making waves with its smart plan for a stablecoin system. It lets people use extra tokens as security to make KUSD, keeping the SORA economy strong. Folks who own XOR have a say in how things run, which is pretty cool.

This system points to exciting times ahead for everyone interested in Polkaswap and the larger world of digital money! Keep an eye on this project – it could change the game.

FAQs

What is SORA Kensetsu and how does it connect with Polkaswap?

SORA Kensetsu (建設) [RFP] is a new project within the SORA ecosystem that’s introducing Kensetsu DAO—a democratic, on-chain group focused on building things like an over-collateralized stablecoin. It connects with Polkaswap because users can trade this stablecoin and other assets securely and privately on this substrate-based DApp.

Can you tell me about the stablecoin launched by Kensetsu in the SORA economy?

Sure! The over-collateralized stablecoin introduced by Kensetsu in the SORA economy is named Kensetsu USD. It’s backed by collateral asset held in individual vaults to boost confidence in the overall SORA system and expand its ability to distribute currency efficiently.

What role do XOR token holders play in the governance of the SORA network?

XOR token holders have a big say—they govern key decisions including updates to terms of service, RFP proposals for projects, and any changes aimed at reducing circulating supply for better striking price stability—all critical actions that shape Soramitsu’s many worlds, one economy approach.

Is there something exciting coming next year for those new to Polkadot or interested in crowdloans?

Yes, definitely! For those who are new—or not—to (Polkadot), keep your eyes peeled next year as phase 1 launch brings excitement especially around parachain crowdloan opportunities which let you support ventures you believe in while potentially receiving rewards.

How does an individual vault work with regards to obtaining debt from it?

Great question—the process starts when someone places collateral into their personal vault within SORA; they then create debt against this security taking out what’s called synthetic currency—this gives them flexibility while helping maintain collected stability ratio ensuring safety for all involved.

Does implementing a democratic DAO model ensure privacy in financial transactions?

Indeed, using a democratic DAO approach means every person has a voice—and with on-chain privacy measures firmly placed within apps like Polkaswap—we make sure each transaction remains secure so people can trust where their dollars move without worries.

Disclaimer

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The past performance of a cryptocurrency is not indicative of future results. Please ensure you fully understand the risks involved before investing in any cryptocurrency. This article should not be viewed as a form of endorsement or recommendation. For advice regarding your individual circumstances, please consult with a professional financial advisor.