Perhaps the most important component of Kujira’s ecosystem is the USK (US Kujira) stablecoin, which is pegged to the US dollar.
But how does this work? What processes underlie the minting of USK, and how does it unlock your DeFi potential within Kujira?
This article provides a guide on how to mint USK, and explains a related strategy that leverages GHOST.
What is USK?
USK is a decentralized stablecoin that is soft-pegged to the US dollar. It is backed by a variety of collateral including ATOM, wBTC, wETH, wBNB, LUNA, MNTA, DOT, and gPAXG. In order to create or ‘mint’ more USK, users need to lock these crypto assets in smart contracts, similar to the MakerDAO stable model.
It is an overcollateralized stablecoin, meaning that it is backed at a minimum of 166% by digital assets. This helps ensure the stablecoin’s stability and reduces the risk of a depeg event where stablecoins are no longer worth $1 each. It is a crucial cog in the Kujira ecosystem and is designed to provide users with a reliable, low-volatility asset.
How to mint USK
- To begin minting USK, you need to navigate to https://blue.kujira.network/mint and connect your Keplr or Sonar wallet.
- Once here, you will be greeted with the different USK markets available to lock your assets and mint USK.
Kujira BLUE dashboard for minting USK
- To demonstrate the process, we will mint 0.5 $USK locking 1$ worth of Arbitrum tokens ($ARB). Click the ‘Open Position’ button.
Minting USK using ARB on BLUE
- Now you will have two main values to input:
A. Input the amount of tokens you wish to lock as collateral. In this example, we’ll lock 1 ARB token.
B. Input the amount of USK you wish to mint.⚠️Important note: The more $USK you mint relative to the amount of $ARB collateral, the higher your LTV will be, and hence the higher the risk of liquidation.
