Kuma Inu Coin is a community-focused decentralised finance (DeFi) crypto project that comprises Kuma Breeder, Kuma DEX, and Kuma NFT.
In a world of digital assets where meme coins are increasing in popularity and value, the coin has become one of the world’s most loved meme coins in the crypto ecosystem.
Large-cap cryptocurrencies tend to be the most common form for transacting around the globe. But an increasing number of investors have chosen to diversify their portfolios with meme coins like Kuma Inu due to their enormous growth potential.
Whether you’re into online shopping, cross-border transacting, or gaming at the best crypto casino, Kuma Inu is certainly a coin to put on your radar.
Dynamics Of The Kuma Inu Coin
Kuma Inu Coin currently has over $27 million market cap and a circulating supply of over 118 thousand KUMA. KUMA is the native token of Kuma Inu Coin and is used in Kuma Breeder – a yield farming protocol that provides a fresh perspective to farming KUMA tokens.
Investors are attracted to the coin due to its fair distribution system that enables the entire community to benefit from the KUMA breeder farming pools.
The project aims to be the first 100% fully decentralised community-driven project in space, making it a truly remarkable meme coin with untold potential that is waiting to be unleashed.
The KUMA token has a fully decentralised autonomous governance system that gives full control to its community. With this control, the community can vote to oversee the entire process of development and marketing, as well as other key elements of the project.
Investors have realised that Kuma Inu is experiencing exponential growth in both its token price and its community in a short time. There are many opportunities for anyone who believes in this project to unlock rewards. For example, KUMA empowers its community by issuing them utility tokens that provide various benefits within the cryptocurrency ecosystem.
This offering extends to DX, governance rights, farming, and vaults – features that ensure all community members benefit from the platform.
About The Coin’s Ecosystem
Kuma DEX
Kuma DEX is a decentralised platform that uses a vAMM-based perpetual contract trading protocol, which leverages traders with infinite on-chain liquidity.
In contrast with traditional AMMs, KUMA DEX users can trade perpetual futures contracts using the Constant Product Market Maker formula with up to 25 times long or short leverage. In short, a funding rate mechanism is available to ensure that the vAMM market asset price aligns with the underlying asset index price.
Users of Kuma DEX do not have to be concerned with threats from centralised authorities who may interfere with their token usage. This is because the DEX was created to be market-neutral and completely decentralised.
Kuma DEX also offers price discovery and arbitrage opportunities, which means it caters to the different use cases that buyers may have.
Price discovery has become ever more important to investors and is a method of ascertaining the spot price of an asset, security, product, or currency. It considers a wide range of tangible and intangible variables like supply and demand, investor risk perceptions, and a holistic view of the geopolitical and economic climate.
Kuma DEX’s approach to price discovery uses advanced technical architecture to consider market factors its competitors do not account for.
Features of Kuma DEX
With Kuma DEX, users are not reliant on centralised exchanges, such as counterparties, to place trades. This is similar to traditional Automated Market Makers such as Uniswap. Through interaction with the DEX’s vAMM smart contracts, traders can get exposure to derivatives for just about any asset available on the market.
On top of that, vAMM offers users consistent on-chain liquidity, which is in stark contrast to most decentralised derivative trading platforms facing liquidity concerns.
Kuma DEX’s platform utility and governance token, dKUMA, is created with a deflationary economic design. With this in mind, 50% of the platform trading fees is set aside for token buyback and burn. This is done to offset rewards token emissions, increase the scarcity of dKUMA and maintain its value.
Kuma DEX Perpetual Contracts
Perpetual contracts are crypto derivatives that allow traders to speculate on the value of specific underlying assets. These can differ from traditional futures contracts in the following ways:
- Perpetual contracts don’t have expiry dates and are effective until the traders close their positions.
- The underlying assets in these contracts are not traded at any stage, which means they avoid custody issues.
- Funding rates are used by the swap price to track the value of underlying assets closely. There is a mechanism to ensure that the perpetual price aligns with the index price by exchanging currency swaps between long and short traders.
The price of perpetual contracts usually differs from the spot price of underlying assets, which reflects market sentiment. For example, if most traders believe that the underlying asset will rise in value, the perpetual contract price will overtake the spot price. If most traders believe the price will drop, the price of the perpetual contracts will drop below that of the spot price.
On a general basis, perpetual contract trading with Kuma DEX bears many similarities to perpetual trading on centralised exchanges such as FTX, Binance, and BitMex. The difference, however, is that all assets and trades are stored and executed on-chain. There is no reliance on counter-parties and risk from centralised off-chain servers.
All users on Kuma’s DEX will have complete control over their funds.
Virtual Automated Market Maker (vAMM)
Kuma’s DEX’’s approach to vAMM uses the same constant product formula as other AMMs. That said, the vAMM does not have an actual asset pool. Rather, the actual assets are stored in a smart contract vault that oversees the vAMM’s collateral.
In addition, the vAMM is used as a price discovery mechanism, although not for spot trading.
With this in mind, Kuma DEX can operate with infinite liquidity and zero impermanent loss for its stakeholders. This is because there is no requirement for liquidity providers.
The DEX’s vAMM serves as an independent settlement market, where all profits and losses are settled directly in a collateral vault. Traders use USDC as collateral when opening long or short positions in any asset.
A key difference here is that no swap occurs. Unlike other exchanges, KUMA vAMM users always arrive and leave with USDC. This means that all profits and losses will be in USDC as there are no liquidity providers inside vAMM’s.
Traders can leverage Kuma DEX by backing a position with a margin lower than the total position size.
Liquidation
Every open position on Kuma DEX contains a margin and notional. The margin here refers to the actual collateral used to back a position.
The notional is the size of the position after leverage is considered and is denominated in underlying assets. The margin ratio vs the notional size will produce the margin ratio.
Liquidation will happen when a user’s position margin drops to 6.25% or lower and is triggered by bots. Bots get rewarded approximately 1.25% of the remaining notional for performing this service. The rest of the margin is then placed in the protocol insurance fund.
Limit and Stop Orders
A user can place an order at a specific price or better with limit orders. A buy limit order will be filled once the price matches that limit price or is lower. Conversely, a sell limit order will be filled once the price matches that limit price or higher.
In terms of stop orders, the system will determine which type of order it is using a combination of stop-loss and take-profit orders. This is based on the trigger price level measured against the last price or mark price when that order was placed.
A stop-loss order is an order that is placed with a broker to buy or sell a security once it reaches a specific price. Stop-loss orders are created to limit an investor’s loss on a position in a security and differ from stop-limit orders. Once a stock falls under the stop price, that order then converts to a market order and is executed at the next available price.
A take-profit order is a variation of a limit order that specifies the exact price from which to close out an open position for a profit. If the security price does not reach the limit price, the take-profit order does not get filled.
Trade Fees
A trading fee is charged when a user opens or closes positions on Kuma DEX. All fees that are collected are diverted towards community encouragement and project development.
Here, 50% of fees are deposited into the smart contract of Kuma DEX DAO, while the other 50% is contributed towards $dKUMA holders. All fees are collected from the collateral vault of stablecoins. Investors must note that this 50-50 split can be changed through decisions made by the community.
Kuma Breeder
Kuma Breeder is a yield farming protocol that provides a new and exciting approach to farming $dKUMA tokens. It’s currently being operated on the Ethereum mainnet. The Kuma Inu community takes advantage of a fair distribution system that ensures that the entire community benefits from Kuma Breeder farming pools.
At the time of writing, the various farming pools on offer were ETH-dKUMA, ETH-KUMA, ETH-SHIB, ETH-LEASH, ETH, AKITA, and ETH-ELON for LP pools. Single token pools offer higher interest rates, including KUMA, SHIB, LEASH, AKITA, and ELON. More pools are in the pipeline and are eligible to be added through community governance.
Kuma Vault
Kuma Inu Coin will provide a Vault system for investors to maximise investment returns. The vault entails pools of funds with an associated strategy on the asset in the vault.
Note that vault strategies are remarkably more active than merely lending out coins.
The Kuma Vault can perform multiple actions to maximise returns through strategies voted on by the Kuma Inu community. Kuma Vaults may be created as a direct response to yield farming and liquidity mining that made locating the greatest yield more difficult than simply switching between lending protocols.
Users who deposit tokens to a Kuma Vault receive their corresponding tokens as representations of shares of the vault.
A key factor to consider when using the Kuma Vault is that a user will always withdraw the same asset that was initially deposited. With that being said, farmed tokens, as well as accrued fees, are sold for $KUMA in the vault. In addition, users can increase the interest rate by staking tokens to Kuma Breeder and farming $dKUMA tokens.
Kuma Vault is opened as a single vault that bears the responsibility for stablecoins such as DAI, USDC, and USDT. Once again, the Kuma Inu community is at liberty to add more vaults through the power of its governance.
Final Thoughts
The Kuma Inu Coin’s two tokens, $KUMA and $dKUMA are extremely popular. A growing community of devoted investors is finding increasing value in this cryptocurrency.
With an active community that controls and drives this project, there’s no doubt that Kuma Inu Coin is a hot prospect that crypto investors would do well to explore. Good luck!
