Acala’s Karura swap has launched the first trustless trading pair and has become the first decentralized exchange (DEX) on the Polkadot and Kusama ecosystems.
With $3.4 million in TVL, Karura Swap becomes live.
Acala Foundation, a decentralized financial hub, announced the announcement in a Medium blog post on Friday (July 23, 2021). The trading pair KSM/KAR is already available on the decentralized exchange, according to the publication.
Acala further claimed that the DEX was launched with more than $3.4 in total value locked in the trustless trading pair (TVL). This was accomplished through the use of Karura’s “Bootstrap mechanism,” an unique feature that allows a pool to attain sufficient liquidity while avoiding market manipulation and frontrunning.
During the bootstrap mode, Karura’s trading is momentarily paused until the essential liquidity needs are reached. Liquidity providers might choose to provide liquidity for one or both tokens in the trading pair during the procedure.
Trading on the Karura Swap begins after the bootstrap mode is completed, and the exchange rate is made public. The KSM/KAR trading pair was the first to deploy the bootstrap mechanism, and it was successful in meeting its liquidity goal, with the exchange rate established by the market, according to the release.
There were also over 1,000 contributions from unique liquidity providers, with the trading pair’s initial exchange rate established at 1KAR : 0.0225KSM.
The following are some of the advantages of using the Bootstrap method, according to the blog post:
“With “Bootstrap,” Karura hopes to enable trustless trading at a fair market rate, reflecting the principles of equitable and open finance for all.”
Meanwhile, the kUSD stablecoin, KAR liquidity mining, and Liquid KSM Lite would all be released later on the project’s launch roadmap. These new functionalities will go live inside the 48-week network lease that was obtained after winning a parachain auction slot.
After a community crowdloan of 501,000 KSM, the Karura project won the first Kusama parachain auction. The staking process involves more than 15,000 people.
Other projects have won the first phase of Kusama’s parachain slot auction after Karura. Moonriver, Shiden, Khala, and Bifrost are among them.