- The KSM / KAR trading pair was the first to go live, allowing users to get their KSM up and running now.
- Bootstrap mode in Karura swap allows for a warm-up phase that encourages a pool to achieve adequate liquidity.
On Thursday July 23, Karura Swap – the first decentralized exchange (DEX) in the Kusama ecosystem – went live for trading. As a result, Karura Swap opened the KSM / KAR trading pair, which is currently valued at over $ 3.4 million (TVL).
The initial liquidity for the KSM tokens was 9.7K KSM. Likewise, the initial liquidity for the KAR tokens was 433k KAR. There were over 1000 one-time contributions, with the opening exchange rate for KSM / KAR being 1KAR: 0.0225KSM.
The announcement also notes that KSM was first available for trading on the decentralized exchange (DEX). Also, users can now pay the transaction fees for Karura in KSM using the Bring Your Own Gas feature along with the liquidity of the KSM / KAR trading pair.
Karura contributed 501,000 KSM to its community-sponsored crowdloan and was the first parachain slot on the Kusama blockchain. The official announcement notes:
With the accessible KSM / KAR liquidity on Karura, users can now get their KSM up and running, trading trustlessly and preparing for the fast approaching KUSD stablecoin loans, LKSM liquid staking and liquidity mining programs.
In addition, users can participate in trusted trading and provide liquidity to Karura Swap. You can also prepare for the next releases on the launch roadmap.
DeFi enthusiasts were eager to access Karura’s custom protocols. These include the kUSD stablecoin, the LKSM liquid staking derivative and the AMM-style DEX.
Bootstrap – Karura’s key feature for better liquidity
An interesting feature of Karura Swap is that it has the ability to start a trading pair in “bootstrap” mode. This is nothing more than a brief warm-up that encourages a pool to achieve adequate liquidity. This also helps prevent front running and market manipulation activities.
With “Bootstrap” Karura aims to enable trustworthy trading at a fair market price. The official announcement states:
On Karura, any trading pair can be started in the optional bootstrap mode, which invites users to secure a share of the pool and provide liquidity via one token or with both tokens in the trading pair.
In bootstrap mode, trading is temporarily disabled for a period of time until the specified liquidity requirements are met. Once the bootstrap period is over, the exchange rate will be published and trading on Karura Swap will be activated.
The first trading pair KSM / KAR managed to hit their liquidity target while the market was able to determine the exact exchange rate.