Kujira & CosmWasm: Pushing the Frontier of DeFi

  • by Amit
  • Dec 25, 2023
  • 4 min read

Kujira showcases the power and composability of the CosmWasm smart contract paradigm. We endeavor to be a blockchain ecosystem driven primarily by a suite of synergistic, innovative, and sustainable decentralized applications (dApps) & infrastructure.

Table of Contents

Why build on Kujira?

Kujira unlocks groundbreaking Decentralized Finance (DeFi) applications in a few essential ways:

Pond boasts pre-installed contracts of key dApps & infra: USK, FIN, GHOST, BOW, ORCA, PILOT, etc.

BOW leveraged liquidity-pools (LPs)

At this point, only the KUJIUSK leveraged liquidity-pool is live on BOW (Automated Market Maker). But with full-fledged leveraged LP functionality nearby, we can observe the vision’s potential. Kujira’s leveraged LPs demonstrate how rock-solid DeFi primitives can work together to create complex products that would otherwise require monumental effort to develop in a standalone environment.

Creating a leveraged LP

Now let’s dissect what a leveraged-LP action entails under the hood:

  1. The user calls the leveraged-LP contract.
  2. Next, if specified, withdrawals from the BOW contract occur.
  3. Then, repayments are made to the GHOST (Money Market) vaults, and, if specified, GHOST debt tokens are burnt.
  4. If needed, the leveraged LP- contract requests borrows from the GHOST vaults and tracks them.
  5. After that, the leveraged LP-contract sends funds (those provided or borrowed by the user) to the BOW contract and tracks them.
    • Furthermore, as part of this process, the BOW contract withdraws and places new orders on FIN, a 100% on-chain orderbook exchange.
  6. Finally, the leveraged-LP contract self-verifies the position’s safety and withdraws any ephemeral funds to the user.

Moreover, in scenarios where a safe position becomes unsafe, liquidation occurs through ORCA, arguably the most powerful liquidation engine in the Cosmos and possibly the entire DeFi landscape.

Understanding Kujira’s modularity

This single contract interfaces with BOW, GHOST, ORCA, and FIN (via BOW). Together, these protocols join hands to seamlessly enable functionality that would otherwise be a herculean task to implement independently. And, in stark contrast to the explosion of complexity often innate to a traditional microservice-like architecture, each piece of the Kujira platform does one job and does it well.

We keep things simple.

This is a perfect example of the web of applications and protocols that CosmWasm encourages. In fact, I daresay that Kujira and CosmWasm synergize better than any other current or historical deployment of CosmWasm.

CosmWasm’s actor model encapsulates smart contract functionality in an ergonomic, robust, and safe manner, allowing our protocols to expose truly composable interfaces. We are already witnessing some of the emergent behavior that stems from the building blocks we provide in both integrations and extensions to the core products.

The most powerful development framework

The atomicity benefits granted by all the building blocks sharing the execution environment of the Kujira blockchain means that Kujira provides the most powerful framework to build with, within the entire DeFi ecosystem.

Kujira scales with composability. And we have many more exciting applications already here, or on the horizon, ready to boost it even further. This includes CALC, Plasma, Blend, Bonds, Quark, Yield Harbor, NAMI, and Unstake, and many others.

Builders, we highly encourage you to reach out to see how Kujira simplifies your dApp ideas and makes shipping more of a reality than ever.