Karura won the Blockzeit startup of the week award as it made headlines this week when it won the Parachain on the Kusama network. We decided to take a closer look at Karura, at what they do and why it is so significant for DeFi.
What is Karura?
So what is Karura you ask? Well, Karura is the sister network of Acala Networks. Acala aims to be the DeFi hub of the Polkadot network, Kusama’s sister network. So, Karura is the Acala application built for the Kusama network. Karura is the first parachain implementation on Kusama which is a big event. Think of the first blockchain being built on Ethereum years ago. But why is Karura building on Kusama? Dan Reecer, Vice President of growth and development at Karura, said in a video:
“Well, there are several reasons. Kusama, just like Polkadot, has crosschain abilities. So, interoperability between blockchains is one. The ability to use the substrate framework to customize our blockchain for DeFi. The network of Kusama and Polkadot are highly, highly scalable in comparison to existing networks.”
Karura will be the DeFi Hub of the Kusama Network
Karura aims to build the DeFi center of Kusama. According to Dan Reecer, the two networks, Acala and Karura, will both serve the DeFi demand by each of these communities (the Kusama and Polkadot community) and will be bridged together.
Karura is considered a layer one blockchain as well as a layer of applications that have been built on their blockchain.
Karura allows developers to use both Salidity and Substrate
The Karura developers have been really thinking outside the box. This becomes apparent when you see the features and the versatility that the new network holds. One of these features is the new KUSD (Karura USD) stable coin which is now part of the Karura network. KUSD is a multi-collateral backed stable coin, similar to DAI.
Furthermore, the Karura network allows for liquid KSM (Kusama) staking and has it’s own oracle system.
Reecer also mentions the Acala EVM that allows developers to use both Salidity and Substrate as coding language. He says:
“The Acala EVM is an environment for ourselves or any team from the Ethereum ecosystem to build using salidity (Ethereum’s coding language). This includes all the tools which they are used to using within the Ethereum ecosystem. What this also allows us to do is customize specific features within the EVM that help improve the user experience.”
The revolutionary BYOG (Bring Your Own Gas) concept
The Karura platform will be based on the BYOG concept. BYOG stands for Bring Your Own Gas fee. Therefore, it allows you to pay gas fees with whatever token is the first token in their native wallet. So, whether it’s Bitcoin or Ethereum, it doesn’t matter. This is a revolutionary feature for a DEX because a major issue with other Dexs is that investors run out of Ethereum to pay gas fees.
Reecer explains the BYOG concept like this:
“So, you might have used Ethereum, Matic, or BSC. Some of these other DeFi platforms where you have to go out and actually find the native token of that platform like ETH, for example, to pay a transaction fee. With BYOG (bring your own gas), we’ve figured out the ability to allow users to pay gas fees in any token.”
Karura is a fascinating ecosystem and blockchain platform that is unlike any other blockchain company. The features and versatility of the network show how far blockchain technology has come.
This article is not financial advice, please do you own research before buying cryptocurrency. If you enjoyed this article you might also want to check out Kusama, Cardano and Ethereum Upgrades Could Fuel Bitcoin Price
Aaron is passionate about blockchain and has been an investor in cryptocurrencies for the past years. He enjoys engaging with other people in the cryptocurrency community online, particularly on Telegram, and learning from experts.