Cosmos seems to be gradually emerging from the Mercury retrograde period recently. Star projects such as RUNE, INJ, and TIA have performed well in the secondary market, attracting a lot of attention. At the same time, another Cosmos ecological project that few people have heard of has also "convinced people with its growth" and quietly surfaced.

DeFillama data shows that the TVL of the Kujira ecosystem has increased more than five times since September, soaring from around US$16 million to around US$88 million in more than two months, which is an astonishing speed. Its token KUJI has also increased by nearly 400% in three months, making it a dark horse.

In fact, if you look closely at Kujira’s “past and present”, you will find that in just a year and a half, it has crossed the ruins of Terra’s collapse and grown into a dark horse rookie in the Cosmos ecosystem. It can be called a “rebirth article model” in the crypto world.

What is Kujira?

Kujira's manifesto is "Everyone should be a whale", which is fully reflected in its vision and goal of giving everyone the right to participate in DeFi fairly. To this end, Kujira seeks to develop a decentralized application (dApp) that enables everyone to conduct financial transactions that are often only available to institutional users, whales or professionals.

Kujira initially launched its first product, ORCA, on the Terra (now Terra Classic) blockchain — a clearing platform focused on Anchor Protocol clearing, which at its peak had over $3 billion in loan assets.

Since Terra went into a death spiral, Kujira migrated to Cosmos to build its own sovereign L1 blockchain and has since created a suite of interconnected products, with more currently in development.

Team and Supporters

The Kujira team operates anonymously, but the products they develop are highly practical and provide excellent user experience, so they enjoy a high reputation in the Terra and Cosmos communities.

Kujira has completed its first decentralized exchange offering (IDO) on Terra Classic’s StarTerra platform and has received support from Do Kwon, GT Capital, Qi Capital, and StarTerra.

It is necessary for us to briefly review the development history of Kujira, among which May 11, 2022 is a key turning point that it cannot avoid.

From Anchor Clearing Protocol to Layer1 Financial Public Chain

Prior to Terra’s collapse in May 2022, Kujira’s role was to serve as a collateral liquidation protocol on Terra. It essentially provided a service for Anchor lending by placing bids on any form of collateral with limit orders below the liquidation price during the liquidation period:

For any user who wants to buy LUNA, they can bid on various forms of collateral during the liquidation period through Kujira to purchase LUNA at a discount. This not only enables users to purchase LUNA at a discount, but also helps improve liquidation efficiency and avoid a chain reaction in extreme cases.

However, the sudden collapse of Terra changed Kujira's original development plan, forcing it to start shifting on May 11, 2022, planning to build a Layer1 chain with the help of the Cosmos ecosystem and Cosmos SDK to quickly restart and run.

The chain went live on July 4, 2022, and the team distributed snapshots to addresses that still held KUJI on Terra. After turning to the Cosmos universe, Kujira's new positioning is a blockchain designed to achieve real returns, providing a decentralized ecosystem for protocols, developers, and Web3 users seeking sustainable fintech.

Kujira's Ecosystem Matrix

As of November 14, Kujira's ecological matrix covers 22 protocols/products, involving collateral liquidation, DEX (including margin trading, limit orders, etc.), liquidity mining, lending market, Launchpad, wallet, strategy trading, OTC trading, P2P trading, NFT trading market, LST, on-chain ETF and other fields.

However, the core of Kujira still revolves around the L1 financial public chain centered on "transactions & earnings". In addition to the key protocols launched by the project team, such as Blue, FIN, and Orca, other protocols/products within the ecosystem can use Kujira's multi-chain decentralized trading liquidity as infrastructure to launch their own services and achieve composability.

In fact, if you compare, you will find that this product architecture and ecological development idea have many similarities with Injective, which is also developed based on Cosmos, and even the former Terra ecosystem. This also indirectly confirms Cosmos' consistent advantages in application chain ecological development.

Blue

Blue is one of the core infrastructures of the Kujira ecosystem, covering functions such as token management, staking, voting, and exchange. At the same time, Blue's IBC function plays a key bridging role in the flow of assets across the Cosmos ecosystem.

For KUJI holders, Blue provides the ability to stake tokens, claim rewards, delegate to validators, vote on governance, and also supports cross-chain transfers between IBC chains.

In addition, Blue also has a collateral function and can be used to mint the Kujira ecosystem's over-collateralized stablecoin USK.

Orca

Orca is in line with Kujiira's concept before May 2022. It is a public auction market for liquidating collateral, allowing anyone to bid for collateral to be liquidated.

END

FIN is a decentralized exchange in the Kujira ecosystem, providing order books, swaps, and margin trading.

BOW

BOW is an automated market maker that enables users to earn profits by providing liquidity, while FIN provides deeper liquidity support.

Liquidity providers can realize income by receiving a portion of the fees from transactions, and have the opportunity to receive additional rewards provided by third parties when staking their LP tokens.

GHOST

GHOST is a fully functional money market where users can borrow and lend using a variety of financial instruments, earn interest at competitive rates, and gain access to short-term loan funds.

SONAR

SONAR is the mobile wallet application of the Kujira ecosystem, allowing users to pay, trade, stake and vote directly through their mobile phones.

PILOT

PILOT is a Launchpad platform jointly built by Kujira and Fuzion. It adopts an Orca-based bidding process, aiming to achieve equal participation for all and provide fair opportunities for users.

From this perspective, Blue, Orca, and FIN are indeed the infrastructure of the Kujira ecosystem, enabling cross-chain flows of (liquidation) asset transactions and liquidity at the bottom of the entire ecosystem:

Blue provides cross-chain and token management services, allowing users to exchange assets obtained through bidding on Orca for stablecoins or other Cosmos assets through functions such as the FIN limit order book, thus realizing the liquidity closed loop between Kujira and the Cosmos universe.

BOW, GHOST, etc. further provide better liquidity or transaction combination functions, forming a complete closed-loop liquidity processing chain. Through IBC, the entire Cosmos universe and IBC assets are connected in series, and the income streams of all products/protocols are focused on Kujira.

What are the positives to look out for?

For this part, we follow the clues. Since KUJI's performance is so outstanding, are there any positive factors worth paying attention to in Kujira recently?

USK adoption accelerates

Kujira's USD stablecoin USK (similar to DAI) is over-collateralized and supported by crypto assets such as ATOM, stATOM, wBTC, wETH, wstETH, wAVAX, wBNB, INJ, DOT, and LUNA.

The circulating supply of USK has been rising steadily since mid-September of this year, nearly doubling from $1.72 million to approximately $3.25 million as of November 14.

Frankly speaking, the current total circulating supply of USK is only about 3.25 million, which is relatively small and can be almost ignored in the entire stablecoin competition.

Perhaps it is for this reason that, according to data from CoinGecko, the peg of USK is not very stable, with prices fluctuating greatly in the range of $0.98-1.04 in the past three months.

In addition, among the collateral, in addition to the packaged assets of BTC and ETH (about 1 million), the minting ratio of ATOM and other IBC assets undoubtedly occupies a dominant position (about 800,000). From the perspective of empowerment, this also helps ATOM as a means to capture the expansion value of the Cosmos ecosystem DeFi protocol.

Of course, this requires USK to not only become the core of the Kujira ecosystem, but also to become one of the universal currencies of the Cosmos universe:

For example, users can first mint USK and bid for liquidation collateral on ORCA, and then exchange the assets obtained from the bid for liquidity on FIN, thereby supporting cross-chain to other IBC networks, or crossing from other IBC networks for liquidation arbitrage.

In this way, multiple combinations with other trading and liquidity products/protocols can also use trading scenarios such as stablecoins to produce a siphon effect and make Kujira one of Cosmos' trading and liquidity nodes.

Full circulation of tokens and high pledge rate

In addition, in terms of token economics, on November 9, 2023, Kujira unlocked the last batch of vested KUJI tokens, which also means that approximately 122 million KUJI tokens in total are now fully circulated.

In the Cosmos ecosystem, high inflation is prevalent, but the KUJI token is a rare exception. From the perspective of supply and demand in the secondary market, this does alleviate concerns about potential selling pressure on the KUJI token in the future.

At the same time, due to the economic design of the KUJI token, which allows stakers to receive 100% of the protocol fees, the pledge rate of KUJI has been growing. Currently, more than 50% of KUJI has been pledged, with a total of approximately 64.3 million tokens.

However, it should be noted that KUJI currently has almost zero trading pairs on exchanges and has not yet been listed on any top or second-tier exchanges. Liquidity is mainly concentrated on the chain and within the ecosystem, so investors need to be cautious about risks.

summary

Looking back now, the secondary disasters caused by the collapse of Terra in May 2022 have not yet dissipated for developers who originally wanted to build financial protocols based on UST in Terra. Many projects have fallen into difficulties or even suspended development.

In the face of this situation, only a handful of projects chose to stay on Terra 2.0, while some projects such as Stader, Mars, and Kujira began to actively save themselves. For many projects, Cosmos has become the best migration option because the one who is close to the water will get the moon first.

However, migration is not easy. It is difficult to make new contributions. Now, a year and a half later, only Kujira has found its own way in Cosmos. Kujira successfully launched its own over-collateralized stablecoin (USK), established a mature trading and liquidity infrastructure, and strived to become the main liquidity node of the Cosmos universe. It is not easy to get out of the quagmire of Terra.

As long as you don’t fall, you can stand up again. Kujira has set a good example for us, and we also hope that more projects originally in the Terra ecosystem can get out of the quagmire and usher in a new stage of development.

Everyone, please move your hands and pay attention~

Thank you for your support, see you next time!