- INVESTMENT IDEAS
The canary’s sweetest song. Karura (KAR) pays 111%
- Stake KSM to liquid KSM on Karura and lKSM/KSM pairs for more than 100% APY.
- Karura is the alpha for De-Fi on Polkadot. Cross-Chain, low fees, fast growth.
- Kusama can and does break at times. Karura is highly experimental.
- Excellent yields on a promising platform. Terms and conditions apply.
Mythical birds - mythical gains? The Karura.
In Japanese mythology, the Karura (迦楼羅) is a divine creature with a human torso and birdlike head. The name is a transliteration of garuda, a race of enormously gigantic birds in Hinduism, translated to the Japanese Buddhist version. (Source Wikipedia)
Karura Network (KAR token) is the experimental version of Acala, Polkadot’s self-proclaimed De-Fi Hub. Deployed on Kusama, the ‘canary network’ of Polkadot, and sticking with the bird metaphors, Karura can experiment with its EVM-compatible De-Fi pre-enabled technology on Polkadot’s super-permissive sibling chain.
Karura was the clear winner of Kusama’s first parachain auction and managed to attract 491,752 KSM in backing. Talk about a good start. Investors are excited about using De-Fi on the Substrate ecosystem (i.e. Polkadot, Kusama and all its parachains). Karura shipped a DEX, swap and staking platform at apps.karura.network. Featuring good UI and micro-fees(™). These are payable in a variety of assets, including BTC and ETH.
Three-digit KAR gains are where it’s at!
In a nutshell, Karura offers staking of KSM for lKSM (liquid Kusama) and a dollar-denominated stablecoin called kUSD, backed by cross-chain crypto assets. Also available: liquidity providing lKSM in pairs with kUSD and KAR for further profit.
Gains are the size of the monstrous mythical namesakes right now, although they have dropped from their erstwhile high of over 400%. At the time of this writing, 3 October 2021:
- Staking KSM for lKSM yields 16% APY
- Staking kUSD / KSM pairs yields up to 80% APY in the form of KAR and kUSD
- Staking KSM / lKSM pairs yields up to 111% APY in the form of KAR
- Staking KAR / KSM pairs yields up to 50% in the form of KAR
A clever staker could deposit half the precious KSM for lKSM and then provide lKSM/KSM liquidity for 111% on the total stake, neat!
Substrate’s claim to fame is to become a chain of chains. Since Karura runs on a Substrate powered chain, it can use all the connected crypto assets. Karura’s team is adding one after the other.
With more than $87m in total value locked, the Kusama DEX is already doing quite well.
Warning: Canary, as in experimental
It’s still very early days right now. In the ‘Earn’ tab of the web application, you can see a warning banner at the top, reading: “Karura is a ‘canary network’ for Acala. It’s an early unaudited release of the code that is available first and holds real economic value. It is highly experimental and unstable.”
On Kusama, developers are encouraged to move fast and break things. KSM devs are used to this and recover quickly. But if you are in the middle of a swap, it might increase your pulse a great deal.
KSM cannot be sent between your Karura portfolio and exchanges directly. This could end with losing access to funds. Use the Cross-Chain tab in your portfolio to transfer KSM between Kusama and Karura chains.
Staking KSM for lLKSM is done via proxy currently. To unstake, you will have to wait for the next phase to be released.
Discord support takes a while for an answer. Despite its experimental nature, nothing terrible has happened so far.
Karura is a sneak-peak into the future of De-Fi on Substrate. You can participate right now and earn good to excellent yields on your KSM. It is distinctly recommended to heed the warning banners and read the documentation before committing large amounts.
Other than that: go, play!
Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.