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Use Cases
USK has an ever expanding list of use cases. At the moment, the biggest use cases are directly within the Kujira ecosystem; however, with time USK will see more use in protocols on other chains. Furthermore, along with Sonar, Kujira is focused on providing the infrastructure for stable, cheap, and efficient payments. USK payments could help facilitate stable transfer of value. In the meantime, aside from its DeFi integrations, the biggest use case of USK is probably that it is a relatively stable store of value unlike tokens like Bitcoin or Ethereum which comparatively see much greater volatility. At the same time, just like any other token on the Kujira network, USK can be used to pay Kujira gas fees for performing network transactions.
USK can be minted on the https://blue.kujira.app/mint page. A separate Dashboard tracking USK backing collateral is part of the main https://blue.kujra.app page. USK can be bridged from Kujira to any Cosmos chain via the https://blue.kujira.app/ibc page. Furthermore, USK can be sent from one Kujira address to another via https://blue.kujira.app/wallet. In fact, using the wallet tab, USK can be sent on a linear vested basis to a chosen wallet by specifying an end date when performing such a send. USK can also be used on the swap tab to exchange assets.
There are many USK pairs on FIN. As USK is the central stablecoin of the Kujira ecosystem, USK pairs tend to have superior liquidity for many FIN tokens. In other words, USK is one of the easiest way to acquire tokens in the Kujira ecosystem and it is often possible to perform arbitrage across different FIN token pairs as crypto markets are often inefficient. The USK collateral / USK pairs are especially significant as they generally have isolated FIN margin allowed which currently allows up to 2.5X leverage by reverse minting USK using a sophisticated mechanism.
There are many BOW liquidity pools with generous incentives resulting from FIN trading volume, 3rd party partnerships, generous community members, and initial team Kujira bootstrapping. By minting or purchasing USK, it is possible to participate in these pools and receive liquidity pool rewards for providing liquidity to help power the BOW market maker. USK can also be used on the swap tab to exchange assets.
USK collateral liquidations are all handled on ORCA. As a result, USK can be used to bid on ORCA to purchase liquidated collateral at a multiple percent discount. ORCA has proven to be a battle tested way to generate significant returns during down markets. By using USK on ORCA, it is either possible to obtain desired assets at a premium after a significant enough decline to cause market liquidations (which often forms a local market bottom). Separately it is possible to put unused capital to work and generate low risk returns (while retaining limited exposure to volatile assets) by flipping liquidated collateral after purchase.
External tools such as SeaShanty help send alerts when bids are successful at purchasing discounted collateral. ORCA bids have been added to FIN, BLUE, and other Kujira applications to inform users when there is any collateral at risk above 95% LTV. Furthermore, as USK uses ORCA as a liquidation settlement layer, by bidding on USK collateral pools, community members not only stand a chance to generate returns but also help the USK liquidation mechanism run smoothly and help empower Kujira as a blockchain.
Last modified 1mo ago