How are you doing? I'm very good. Thank you.
Nice. So I think we are ready to start the space.
So I'd like to welcome everyone to one of our last Twitter spaces of the year and today we have the pleasure of welcoming Korra Protocol as our guest.
A protocol for decentralized lending without liquidations and during this Twitter space we're going to learn about course fundamentals and how it infrastructure positions
as a key building block for future DeFi application. So welcome and I would like to give a chance to introduce yourself and yes, let's get it started.
Let's do it. Thank you so much. Yes, so my name is Setson. I'm co-founder in the Corra protocol and I have previous experience working as a sub-world developer.
and previous jobs include working at consensus for more than three years and I've been a theory on developers since 2017. So yeah.
Great. I would like to start by asking you how the idea of Cora came about and if you can already introduce a little bit the concept of Cora protocol. Yes, of course. So actually,
After leaving consensus back in 2021, I worked for a protocol in Ethereum that was pretty much doing option pricing. At that point I also was collaborating with other protocols
like Uma in Ethereum and I was looking into build bolts on Open which is another options protocol and then we were looking into the ecosystem of options how everything was moving and evolving and we were kind of thinking that really
options are a traditional product that normally is for sophisticated investors and we were looking into how can we help the options ecosystem to evolve and then we started looking and doing research and we found that actually you could come
buying options with a lending and you could have what we call lending with our liquidations which we found is a very very big problem and at least I've been suffering a lot because of that so yeah that's how we end up with this
protocol design, the rating is quite innovative. And just a bit more about Koran, what we essentially do, actually in reality Koran is a structure product, more from a traditional finance concept, point of view, and what we are doing
is combining capital plus lending into a single product. Why lending? Because we think lending is the most wise to use case and everyone really understands lending. So we are basically constructing this structure product into a lending with our liquidation.
So that's a very interesting concept and as you said a very needed one anyone that has a little bit of experience with D5 will have struggles with liquidations at some point or another so definitely a very much needed tool for people engaging in D5
So at this point I would like to ask you to maybe go a bit deeper into a chorus main building blocks. What is its main approach and how does it differentiate itself from other more traditional of
approaches for guaranteeing safe loans. Yes, so in order to answer that, let's recap a bit how traditional lending protocols work in the blockchain. You basically have that the borrower essentially is the positive and
And then he's getting in exchange, let's say another stable coin, but then he is under certain terms where the protocol is telling to the user that you are going to have a liquidation threshold. And what does that mean is if the
price of your collateral goes down, you are basically going to get liquidated. And this has been working definitely well. I mean, we had in 2021 more than 50 billion in TBL in the whole lending protocols, but we think there is a better way. And when you look
at these protocols you basically have the full risk on the borrower side. The borrower is taking the loan, he needs to constantly monitor their positions, he needs to let's say the price of the collateral goes down, they need to top up their position so they need
to add more collateral in order to have a certain collateral ratio that they feel comfortable. So within this experience is far from perfect and obviously it's stressful for the borrower and in Koram is very different. So what
what we do essentially in Cora is moving the risk, like I said, fully raised on the borrower, but we move it to the liquidity provider as we call to the lenders. And then the lenders are assuming the whole risk. So what is this, as more change,
is that we don't need liquidators. Liquidators are also a point of failure in traditional lending protocols because if they don't work properly, the system is going to have bad depth. If you look into the history of block
let's say maker but in 2020 there was a problem with some keepers doing options and offering zero so I think there were a couple of bots basically earning millions just because of that because the liquidation system failed so
Obviously the liquidation system has been evolving and they are getting better these days, but still Kora doesn't rely on that. So we simply have a liquidity provider who is taking the risk, but obviously he is not alone and thus, Kora has
because we are helping the liquidity providers to avoid losing capital. How do we do it? Well, first, setting up proper LTVs or loan to value, which means that in Cora, we have the same concept of lending pool
but this landing pool has constraints in terms of let's say I have one ethereum I come to the landing pool I deposit one ethereum then what is the maximum amount that I can get with my ethereum right and that's the ltb the ltb
the Tb helps to define a proper value and we back test this and we run a lot of simulations so we can increase the probability to have losses. And secondly, the LP is taking a risk. So how
money should the LP charge for taking this risk. And that's where our modular architecture comes into the game because what we do is we have a lending pool that can have associated any well multiple price models but any of the well
listed price models that we have in the protocol. And then by using these price models, we can calculate accordingly what would be the fee that LPs should charge for taking the risk of giving their capital to the borrower.
Yes, that is clear. So maybe now that you mentioned that there is basically on the one hand borrowing fees for the people that are borrowing money from a certain LP and on the other hand there is also a fee for those that are providing liquidity for one
So maybe can you clarify how these escalculated basically and does that mean that the price changes depending on the different health keys? Essentially we are pulling the full liquidity from all the health
So LPs deposit and actually we have a concept called rounds in the protocol. So basically we run these rounds, let's say of 28 days and then each particular LP is locking their capital for 28 days and we are going to have
This big pool of capital, right? So then borrowers can come and take any money from this pool of capital, but then the way the price the fees are calculated is actually is some mix there are different prices
models, some of them could be purely black sholes, which is an option pricing model for, for, for, it's a pricey model for options, inter-ectional finance. But we are currently using a hybrid price model. And this hybrid price model is
a combination and this is common because Kora essentially says structure product and the theory of structure products say that this product is a combination of lending in this case capital plus protection and then because you had two products products mixed
into one, then you need to price it according to each individual product. So we are basically have like a base rate and then you have the protection part which is basically as if you will be buying a put option and that's the part that gives you the protection. So
Essentially, the higher the amount that you are borrowing, I think it's fair to say that you would pay more because that means there is more risk for the LP to lose capital. However, we have run simulations and we have found that
lateral ratio of 166%, which is with a LTP of 60%, is very, very competitive with traditional lending protocols like, let's say, ABE or Compound.
So we're expecting actually to launch the protocol with LTP of 60% and trying to be, yeah, to use, that's gonna give us very competitive borrowing fees. And obviously you had the benefit that you cannot get liquidated. So I think that's a bit advantage.
Okay, thanks for that. That's really interesting. And when I was reading about Akora before I was
I also noticed that there is another quite cool feature that you implement, which is basically that Kora offers the ability
to basically making the pricing model in a decentralized manner. And I would like to ask you how does that work? And if you could explain what the benefits are of having pricing model decentralized.
Yes, so this is mostly because the each lending pool has associated a particular pricing model. So basically if there is an entity controlling the pricing model, you could R.
that this entity is controlling the protocol, because what can happen is that maybe an entity could do, could behave in a bad manner, which might make the protocol to behave improperly and get a benefit from it, which is really bad.
So we want to make Korra fully decentralized and actually the contracts are immutable. There is no availability in place because we really want to be fully decentralized and to make Korra a public good.
So if we have this any entity basically managing the pricing model, that's a risk for us. So we are currently working with the Uma protocol. We are looking into some design mechanisms that we
enable each pricing model to be fully autonomous and by using economic incentives we are basically going to allow anybody to propose changes in the price model. Let's say a very simple example. Let's imagine there is a price
model that is using external value to price the borrowing fees. So who's gonna push this value to the borrowing fee to the pricing model? It's difficult right because what if this person is trying to cheat the system and get a
benefit but then we are looking into Uma because by using Uma we could allow anybody to propose changes in the pricing model but then there is the possibility for a party to dispute that value. So let's say
I'm updating a value that is going to affect the system or that is wrong. This particular party or any other party could simply dispute my proposal and then this will trigger a dispute into the Uma
ecosystem. So we can use this Oracle mechanism to find what is the right value. But obviously this has to be this needs to have economic incentives. And that's where let's say we want to make a proposal to this pricing model. We need to as a
a proposal, you need to put some skin in the game. For instance, I could add a bone to the system and if I'm doing a proposal that is malicious, then the dispute will take basically, will dispute my proposal and if I'm wrong, I'm going to
reducing the money. So this is adding economic mechanisms and we hope that this could help us to to to decentralize the pricing models. And we are actually working with more complex features in the pricing model.
In particular, because when you see you have this smart contract where someone can pose a value, right? But then maybe someone malicious can simply put a value, pose a value just for the, for to make the pricing model to trigger a dispute.
But then if the pricey model is not working, you are basically adding and doing a denial of service attack. So for that reason, we are adding full tolerance mechanism. We are basically even if a person is
sending a malicious proposal, there could be another party to simply come dispute, propose a new model and so on and so on. So more people basically could come to propose and that makes the pricing models more robust and stop our basically.
And what is the process for a proposal to get accepted? In which sense to be a proposal?
Yes, if you make a proposal as a proposal, then you mentioned that someone could dispute the proposal if it's malicious. And when the proposal is good, what is the mechanism that basically makes it adopted? How is the decision carried out?
Yes, so that part is still on their design, but there are two possibilities. The first one you could basically do like a white listing process where let's say I have X amount of capital and I want to be a proposer. So the contract allows me to lock
let's say Koratokens and then just by doing the locking I immediately become a proposer, a wasted proposer. And then if I behave maliciously then basically I can lose my stake and that's kind of you are in force to behave properly.
But the problem here could also be that maybe the cause of cheating the system could be lower. So that's why we had the fault tolerance. Now the second mechanism to one is by what listing and the other is by simple
being, you know, we allow anybody. And I think we are more inclined towards that. And the economic incentive here is that you need to put an X amount of capital. But as I was saying, if, let's say I put some amount of capital
but I make the protocol not working properly. Maybe I can maybe I'm earning more money in a different way. So we are thinking to basically include like a curve where the first bond would be like say 1x but then the second person could be could be
posting twice that amount. So you're basically doing harder for malicious actors to propose new new new ground values. So that's the second part just anybody. But the main benefit for people making proposals
is that we want to include native economic incentives within the protocol. So basically, at the end of each round, we can this give to each particular party for doing their duties correctly, a certain amount of the
performance of the fees of the pool. So then they also have economic incentives to have the protocol. Okay, thanks for clarifying that. I think I would like to ask now, what are the
what brought you to Aurora and how do you see the evolution of Corra within the Aurora ecosystem? Yes, I actually been following near since it launched and also Aurora. I think one of the main things that we are
very excited about is the community. I think the community near Anina Rora is amazing and we really want to see our product grow in this ecosystem. We also think that it's a big opportunity because near has you know the technology
we are even thinking to perhaps in the future to do a native implementation of KORA, but you know that requires a different language. However, since our main strengths are within solidarity, we are
planning to first release this in Aurora and if we achieve enough product market feed and enough growth, which I think we have a lot of opportunities because up until now, I don't think there is another lending protocol without liquidations in Aurora. So I think
There is a lot of use cases that we envision that it could be possible in a national ecosystem. Yeah, definitely. It's very much needed this kind of project in this ecosystem.
is one of, it's definitely the first landing protocol without liquidation. And on this point, I would like you to elaborate on the overall vision of CORA protocol because it's not just a landing protocol without liquidation
but he's also trying to situate itself as a fundamental block for a new suite of DeFi applications. And I would like to ask you what the overall vision of Cora is and what kind of applications you would like to see built on top of Cora. Yes, that's a great question.
And actually when you think about it in existing in the current ecosystem in the blockchain, you can see that many many products were built on top of lending protocols. Like all these strategy products
Farming products all these type of products were built on top of lending and But actually when you look at that that also if there is a problem in the base layer that lending that Problem gets propagated to the higher levels, right?
So what we are doing is we imagine that Coran and the Holocaust system of applications that have been currently built on top of traditional lending protocols could be built in top of a non-liquidatable base layer. And we think that these could have
have a lot of impact because we can envision products like strategies, but where you cannot get basically liquidated or affected, leverage is taking. Actually, that's one of the more important use cases that we are currently observing.
Because we are in a bear market and we are seeing the conditions and I think it's very very normal these days that people is moving towards more regions and Staking is giving you that right so we are looking into how to
compose certain strategies by doing leverages taking but without the risk of being equiditated. And I think that would enhance the experience in protocol slide, let's say in Metapool where you can state your near but even leverage your near and yeah.
Okay, that sounds really exciting plans. And since we're talking about the overall vision, I think it would be a good time to ask you as well about Corus Roadmap and strategy for depth coming year.
So right now, our main priority is to finalize the core protocol. There are a couple of pending things in terms of core development. We have most of them, of the protocol ready, but
For instance, we want to tokenize the positions as NFTs. So we are working on that. Also, the centralizing the pricing models is still on the development. So we hope to complete that in Q1 of next year.
And after that, the plan is to do the alpha release. So that would be basically one step before doing the main launch. And another thing that I didn't mention, 19 is good to mention,
is the fact that Koram is a very lightweight protocol. The protocol is super simple, I mean, simple in some way, but obviously it has its complexity, but it's very compact, various small, very simple protocols.
And it doesn't really require many dependencies like we only require one Oracle call and that's pretty much so basically our plan is to go multi-chain and for that we actually
the value of a multi-chain governance model. So with this multi-chain governance model, we could basically deploy multiple blockchains and manage the protocol very, very simple because one problem about launching a protocol in multiple blockchains
is that let's say you want to do a change and then you need to do a change in one blockchain and on the other. So I think that's a big problem but we did a multi-chain governance model and basically we could propagate the decision
in multiple blockchains. So I think that's going to be hugely beneficial. And secondly, I think one important part is the strategies. And we want to support builders, people who want to build on top of Koran.
because I mentioned we really think this could be a fundamental block for a new types of applications. So we want to support people by running a grants program and support whoever wants to build.
let us know, we are very happy to talk in any way that we can support. And actually, we are going to include this is something that is still under design, but this is with the goal of growing the core ecosystem. We want
We are planning to include a native incentives for what is called referrals. We call it integrators. Basically people who build on top of Korra, they get native incentives on top of why they could earn.
in a different layer. So yeah, I guess that's the override vision, the override strategy to continue growing the core protocol and trying to go multi-chain to. So yeah.
Great. That sounds really cool, especially like going multi-chain. I think it's so important at this point for the evolution of the overall space. So definitely great to hear that this is on the plan. And I would like to ask you
to maybe talk about the upcoming test net that is scheduled for today if I'm correct and I would like to ask you if you could elaborate and explain to the listeners that might be interested in testing out Kora how they can participate to
the testnet? Yes, we are actually, we announced the testnet in theory for the next 30 minutes, but it is actually live. So people could go to Aurora, Hypen, testnet.app.com.
cora.money. Yeah, we want to share the link, but actually is ready. So I think it's very simple. You just go. There is a small banner that you can see where it is signaling to you.
that you should go to the for set so you can go to the for set then get some core at testnet tokens and then you are going to be able to basically provide liquidity and borrow and using these testnet tokens. So what we are looking is
First obviously for people to start playing with the app right now we have three supported flows. Add in the Quiddity, borrow in our campaign. We are finalizing the management of the position.
But yeah, the idea is for the users to start playing with it, report issues, give feedback. I cannot say that a lot, but help us.
Basically we have a corral OG role. Basically the way you become a corral OG is still, we cannot say that yet but the only thing I can say just contribute help us and
I think we can create a protocol ecosystem, obviously you could get rewarded. But yeah, try the app, give us feedback, and that's currently what we are looking for.
Awesome. And in terms of your basically cooperation with Aurora, I wanted to ask you what are the ways in which there
ecosystem can support you at this point with with the core and its adoption.
Yeah, lots of great questions. I think you guys are already helping us a lot. We really appreciate to, you know, to have to take in the time to be here. This is amazing. It is actually our first student space, so that's also something we are going to remember for
long time. But yeah, I think the most important for us right now is building our own community and trying to position our product. So because it's important for us to get feedback, we want to know what people think about the product.
protocol. We really think is amazing obviously we are a bit biased but we want to hear from the user. So I guess what you guys are doing is perfect and yeah you are already doing a lot. Okay that's nice.
to hear that. And I would like to ask you what are the challenges that you might anticipate in the deployment of Cora and also its marketing strategy, something that I think it's interesting to hear what your ideas are because everyone in this
is kind of asking the same questions and trying to find answers so I wanted to ask your idea on that. Yes, so I think one cool thing about Korra is that we are actually, we haven't got any
investment. We are purely self-proofs-trapped, we got the Assong grants and here we are very close to Mainnet and NoVcMoney. I think that's an narrative that we think the community would love. We want Kora to be a public good, we want
to be a fully decentralized protocol and actually we are working towards that. Everything we are doing in the centralized enterprise models, we're also, I didn't mention but there is going to be an opportunity for risk managers and quants who want to participate in the risk
management of the protocol to get involved. We are also looking into creating this, um, their, this role called risk manager. So everyone who proposed basically price models or changes in the lending pools, they also are going to get rewarded for, for proposing
these changes and obviously if the protocol gets a benefit. So that's the main idea, the main vision and yeah we just want to make something cool, something that people would love and purely following the ethos of the centralization and community on.
This is all very awesome to hear. It's really important to have this kind of vibe, but to bring this vibe into the space, especially at this point. And as I think we have covered a lot about Kora,
And I don't think there is any other questions left. I would like to ask you to perhaps share any call to actions or any final remarks to bring this Twitter space to a close. I think like near week would like to ask something. Go ahead.
Hey guys, New Week here. The number one community platform on the Aurora. So, so me personally, I just I went through the core products and the tennis app and I'm honestly I'm blown away by
I had the models work. So eventually some questions came up to me when I was trying to wrap my head around how it works. So since tomorrow's table from the LP, you need to
opposite if or any volatile assets and pay premium fees to the LPs. So I was wondering, are all the fees go to the LPs? If just then it seems like Korra is not earning any revenue
revenue from this operating model or am I missing somewhere? Yes, so the idea is that the protocol could get, yeah, the rest what you mentioned is true, all the physical goes to the LPs, but what we are planning is to
to basically the protocol will get a certain percentage of the borrowing fees when the pool is profitable in a certain round. So if the pool is earning then you know we are all happy so you can share with us with the protocol a bit so that's the idea. Yes.
Okay, I see. That's great. So one more question about how the protocol works. So to execute the put option operations. For example, when when the ETH price dropped to the strike price and then we swap to
stable right? So where will this happen? Is it happen on our decks or elsewhere? So there is really no option that's the funny part. Like when you look at traditional options protocols, the way it works is that
the liquidity provider is locking capital in a pool and then he is providing to the put buyer a token representation and then the put buyer just go away with that token but then the capital stable coin.
That the put option writer is locking is not doing anything. So that's where we were like Well, that's crazy why instead of just locking that capital Why don't you just don't you just give to them to the other party and you would be basically
in the same risk profile. So when you analyze the profile, the risk profile of a put option seller, compared with Korra, is actually, you could say it's the same. However, in Korra, you have many advantages because when the borrower is
is borrowing the liquidity provider is providing less capital and charging from this type price. So let's say I want to borrow $800 and then the borrowing fee is let's say $20.
So in that option's protocol, the LP would lock $800. But in Cora, the LP is given to the borrower, $800, minus the borrower fee. So you are giving $780. So that's more capital efficient.
and traditional lending put option selling. And it also gives a bit of a buffer to the LP because now he can receive bigger price decreases of the collateral.
Does that answer your question?
I have pretty much, thank you for the answer.
Okay, so maybe one more question. So we have the protocol works. I understand that users won't be able to borrow. Um, voter access, but only borrow stable coin. Um, I think this was
somehow like we will be the type of users. So what are your opinions on this and we will in the future, Korra will come up with the new models that allow users for all the entire access also. Yes, so I think one one thing
that we see is that basically the liquidity provider if he is providing other assets, he's also going to be exposed to the price decreases of those assets. So that kind of makes the system more complex. We saw we definitely
can explore that part. What we are seeing is to, or the way we are seeing other assets is mostly in a composable manner. So basically a certain LP could provide capital. You have a, let's say the base layer has pure
stable coins and then you could have a way to perhaps abstract another layer where people can borrow different assets but what you can do is you simply you can get the stable coin and then you can buy the the particular
The LPs don't have exposure to these assets. It can be possible but another Lager. But we are going to think about it because we haven't explored that much of that area.
Nice, thanks for the great questions. And so at this point I'd like to ask you if there are like the key takeaways from these Twitter
And about Cora, what do you want people to retain about these and final call to action when it comes to participating in the Cora test.
Join us, come to our Discord and try our product, give us some feedback, I think that will be the most amazing part. And yeah, we are ambition in the future without liquidations.
Great. So thanks a lot for this conversation. It was really interesting to learn more about Kora and I'm really excited to see
decentralized lending without liquidations platform on near and or ecosystem and I can't wait to see it all come together.
Thank you so much. Thank you.
Okay, then I wish a great end of the day to everyone or start of the day depending on where you are located. So thanks a lot and have a great day and nice holidays. Thank you. Bye.