Kuma Inu Coin is a community-focused decentralized 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 been growing in popularity to 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 potential for growth.
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 a market cap of over $27 million 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 has a goal of being the first 100% fully decentralized 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 decentralized 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 come to realize that Kuma Inu is experiencing exponential growth in both its token price and its community in a short space of time. There are many opportunities for anyone who believes in this project to unlock rewards. For example, KUMA empowers its community by issuing them with utility tokens that provide a variety of benefits within the cryptocurrency ecosystem.
This offering extends to DX, governance rights, farming, and vaults – features that make sure that all community members benefit from the platform.
About The Coin’s Ecosystem
Kuma DEX is a decentralized 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 by 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 make sure 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 of centralized authorities who may interfere with their token usage. This is because the DEX is created to be market-neutral and completely decentralized.
Kuma DEX also offers opportunities for price discovery and arbitrage, which means that 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 takes into account 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 that its competitors do not account for.
Features of Kuma DEX
With Kuma DEX, users are not reliant on centralized exchanges, such as counter-parties, 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 decentralized derivative trading platforms that are faced with 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 emission and also to 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 such time that the traders close their positions.
- The underlying assets in these contracts are not traded at any stage, which means that they avoid custody issues.
- Funding rates are used by the swap price to closely track the value of underlying assets. There is a mechanism in place to ensure that the perpetual price aligns to the index price by an exchange of currency swaps between long and short traders.
The price of perpetual contracts usually differs from the spot price of underlying assets, and these differences are a reflection of market sentiment. As an example, if most of the traders believe that the underlying asset will rise in value, the perpetual contract price will overtake the spot price. If there is a belief amongst the majority of traders that 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 centralized 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 counterparties and risk from centralized off-chain servers.
In essence, 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 all of 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 is able to 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 make use of USDC as collateral when opening long or short positions in any given 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 use leverage with Kuma DEX by backing a position with a margin that is lower than the total position size.
Every open position on Kuma DEX contains a margin and notional. The margin here makes reference to the actual collateral that is used to back a position.
The notional is the size of the position after leverage is considered and is denominated in underlying assets. The ratio of the margin 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
With limit orders, a user can place an order at a specific price or better. A buy limit order will be filled once the price matches that limit price or 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 price level of the trigger price 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 in order 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 it is then 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. In the event that the price of the security does not reach the limit price, the take-profit order does not get filled.
A trade 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 stable coins. Investors must note that this 50-50 split can be changed through decisions made by the community.
Kuma Breeder is a yield farming protocol that provides a new and exciting approach to farming $dKUMA tokens. It’s currently being operated on Ethereum mainnet. The Kuma Inu community takes advantage of a fair system of distribution that makes sure 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, ETH-ELON for LP pools. Single token pools offer higher interest rates and these include KUMA, SHIB, LEASH, AKITA, and ELON. More pools are in the pipeline and are eligible to be added through community governance.
Kuma Inu Coin will provide a Vault system for investors in an effort to maximize returns on investments. The Vault entails pools of funds with an associated strategy on the asset in the vault.
Note that vault strategies are remarkably more active as opposed to merely lending out coins.
The Kuma Vault is capable of performing multiple actions to maximize returns through strategies that are 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.
When a user deposits tokens to a Kuma Vault, they 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 stable coins 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.
The Kuma Inu Coin’s two tokens, $KUMA and $dKUMA are proving to be extremely popular. There is a growing community of devoted investors who are 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!