The SORA community just introduced an ambitious new project called Kensetsu, which aims to strengthen the XOR economy. The system, which bears striking similarities to the esteemed maker DAO platform, focuses on a new stablecoin, XKUSD.
Before we delve into the intricacies of this project, let’s start rolling out some of the key terms:
1. Vault: In the context of blockchain and DeFi, a vault refers to a smart contract that locks up tokens and manages them to generate yields or perform other actions according to predefined rules.
2. XKUSD: This is the name of the proposed stablecoin in the SORA Kensetsu system. A stablecoin is a type of cryptocurrency whose value is pegged to an external reference, often a reserve of assets. In this case, the XKUSD is pegged to the US dollar.
3. Stability Fees: These are charges incurred for the utilization of the system, specifically for the creation of the XKUSD stablecoin in this case. The fees are primarily used for system maintenance and risk management. The project is in its initial stages and comes in two phases. Phase 1 revolves around the creation of over-collateralized tokens that are locked in individual vaults and subject to stability fees. If the value of the collateral in a vault falls below the value of the XKUSD debt from the vault, liquidation is triggered. XOR token holders govern this process, voting on-chain for decisions or “extrinsics”.
To further promote XOR-XKUSD liquidity, a fraction of the collected stability fees is proposed to be distributed to liquidity providers. These providers, who stake their XORXKUSD liquidity, play an essential role in this new system. The second phase, planned for future implementation, will introduce the feature of allowing swaps to and from approved stablecoins. This function resembles the Peg Stability Module in Maker DAO.
The SORA community has proposed this project, but the task of working out the intricate details for its implementation will fall on Soramitsu, the development and design powerhouse. The key goal is to reduce the circulating XOR supply and thereby boost confidence in the SORA economy. The success of this initiative heavily relies on the creation of demand for the new stablecoin, XKUSD.
With a deadline set for August 2023, all eyes are on the SORA community and Soramitsu as they embark on this journey. This moment marks a crucial turning point in the development of the SORA ecosystem and the underlying XOR economy. Stay tuned for more updates as this ambitious project unfolds in the coming months.