Kolibri announced the news in a blog post on Thursday, February 18. As Crypto Economy reported, Kolibri launched the testnet of its kUSD algorithmic stablecoin on Tezos Delphi testnet in January of 2021. The team said that this week, they deployed a release candidate of the Kolibri production contracts, using the past week or so to perform extensive testing. Now the team has opened these contracts to the public.
Kolibri (kUSD) is a stablecoin soft pegged to the US Dollar developed by Hover Labs. Kolibri, in essence, is a system of smart contracts on Tezos to issue kUSD stablecoin. kUSD is the first algorithmic stable coin available on Tezos that is trustless and collateralized by Tezos’ native coin XTZ.
The stablecoin is issued on Tezos by deploying non-custodial smart contracts called Ovens and are owned by the user who deploys these contracts called Owner. Owners can deposit XTZ to Ovens as collateral and can generate kUSD against the collateral in the oven. As the Ovens are non-custodial, owners can withdraw their XTZ at any time.
These ovens serve as Collateralized Debt Positions (CDPs), and owners should maintain a collateralization ratio of 2:1, which means every $1 of kUSD is backed by $2 in XTZ. The owners borrow kUSD for XTZ collateralized in Ovens. A stability fee is also applied when borrowing kUSD that will now be adjusted through governance.
Before the mainnet launch, users had to install the Thanos wallet browser extension. After the mainnet launch, other Tezos wallets like Galleon and Kukai will also support kUSD. The team also expects a kUSD / XTZ liquidity pool to be live on Dexter, a decentralized exchange on Tezos, on late Thursday, February 18, 2021. Furthermore, a binary options exchange SEXP will also be launched later this month which will use kUSD as its settlement asset.
The Kolibri team, about future plans, said:
“In the coming weeks and months, Hover Labs intends to continue to refine and open source more of our tool chain for the ecosystem as well, with our focus set on establishing distributed governance so the holders of Kolibri can help steer and dictate the protocol. In addition, we’re going to be open sourcing the contracts, frontend, and tooling we use to manage our multisig contracts.”
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