The combination of CeFi and Defi

02 Oct 2020

I. Market context

There is a funny fact in the so-called Decentralized Crypto market, which is that most solutions for decentralization are owned by centralized exchanges. For example, solutions related to Staking are an example.

In 2017, the concept of Staking or Proof of Stake (PoS) is still a strange concept, but now, the number of projects using PoS has increased significantly, and most of the new DeFi projects use PoS and Staking. However, currently, centralized exchanges (CEX) like Binance are still holding the reins in this staking segment. Users can only stake to receive tokens and trade on CEXs like Binance. And of course, when the asset is on CEX, it's not really yours either.

Another problem is that when users’ assets are concentrated in CEX, no real transactions occur on the network. Therefore, the Node Validators will rely heavily on CEX to earn more passive income (Node income depends on transaction fees on the network). This creates more problems of centralization and lack of liquidity in the system.

Obviously, DeFi needs a total solution that allows many aspects of DeFi to be truly decentralized as its own goal. Kira Network is aiming to solve this problem.

II. Overview

Kira Network is a decentralized network, created by Kira Core JSC - a company specializing in providing DeFi and Crypto solutions. Kira Network is currently open source, is managed by Kira Core and will be assigned to the community for management in the future.

Kira Network is currently operated by neutral networks called Validators, using the Tendermint consensus mechanism - the well-known mechanism that operates on Cosmos (ATOM). One interesting point of Kira is that Kira Network is not really controlled by centralized parties, including its parent company Kira Core JSC. Thanks to Tendermint and Validators, Kira Network is a decentralized network that does not depend on the management of a group/organization.

This seems to be Kira's biggest selling point/strength and also the core value of Kira.

The second feature that Kira wants to focus on is being able to let users stake across platforms. This is one of the features that makes Kira Network able to become Unicorn in the coming years.

III. Market size

Currently, Kira's target customers are quite diverse. It could be traders, or holders who want to stake to farm yield, or both (those who want staking and trading). However, it seems that Kira will have to compete with a lot of competitors since Kira Network is still considered an "exchange", and the competition between exchanges is currently very intense.

The strength of the project is that they are entering the "middle", between DEX and CEX. This is an area that still doesn't have many competitive elements, so there will be no problems with big players like Binance or FTX.

IV. Key product

Liquid Staking