Q1: Will I be able to trade using my hardware wallet?
Yes, Kira will be compatible with a range of hardware wallets, beginning with the Ledger Nano S/X.
Q2: What makes Kira a 'hybrid' exchange?
Our architecture employs a hybrid of two quite different consensuses mechanisms; Multi Bonded Proof of Stake and Multi Bonded Proof of Authority. The former guarantees the security of the settlement layer and the latter provides extremely high transaction throughput across our exchange zones
Q3: What makes you an 'interchain' exchange?
We will comply with Cosmos' Inter-Blockchain Communication (IBC) standard and the Interchain Message Passing Protocol specified by Polkadot, as well as other core standards that might emerge in the future.
Q4: Will Kira have the native token, if yes, what role does it play?
Kira's native staking asset is called the Kira Exchange Token (KEX). KEX is used to secure the network and delegating KEX yields block rewards, network fees and exchange fees for stakeholders. KEX also powers the on-chain contracting mechanism via the community fund and is used in the permissionless token issuance process.
Q5: If there is no pre-mine, how are KEX tokens created?
All KEX tokens are created either directly, or indirectly, through mining. The direct mining process involves operating a validator node during the testnet and incubation phase of the Kira network launch. The indirect method of mining will be disclosed at a later date and also will be fully permissionless. During the mining phase, KEX tokens will be created through a dynamic inflation process, which is required to ensure the security of the network.
Q6: Will the Kira team receive or reserve any tokens for themselves?
Yes, Kira team will reserve 20% of the KEX tokens.
Q7: Why is bonding needed?
Bonding is required to ensure 'skin in the game' for our Proof of Stake consensus. When assets are 'at stake' it means that, if a validator to whom the stake is bonded misbehaves, some of those bonded assets can be slashed (e.g. destroyed). This incentivises delegators (the users who bond stake) to consider carefully which validators they commit their tokens to.
Q8: Why do you need to bond multiple tokens and why they have to be whitelisted?
In the context of Kira's Multi-Bonded Proof of Stake consensus, multiple staking tokens are employed to promote the long term security and decentralization of the network. All PoS tokens have a tenancy to accumulate into the hands of fewer and fewer network participants which, over time, has the potential to result in cartel-like behavior. For this reason, Kira employs a diverse set of stakeable assets, which are continually rotated in and out of our whitelisted asset pool, thus keeping the risk of centralization in check.
Tokens allowed into our staking pool must always be whitelisted, because the value of the resulting assets must be priced using our native staking token (KEX) and the maximum share of rewards share that each 'non-native' staking asset can earn must be carefully defined. Otherwise, a malicious actor could print and inject large numbers of worthless tokens in order to claim an outsized share of staking revenues.
Q9: How does Kira scale transaction throughput?
Kira employs a hub-spoke architecture such that each order book can potentially be served by a dedicated Tendermint blockchain. Furthermore, each of these shards employs a very small, but highly trusted, validator set that is elected by governance; it is this approach, called Multi-Bonded Proof of Authority (MBPoA) that enables Kira to deliver transaction speed competitive with centralized exchanges.
Q10: How will you, as a team, make money?
The Kira Team is primary incentivized by a process called on-chain contracting, which is controlled via governance. The network will have full custody over a community fund that will finance the Kira Team throughout its continued development efforts. Additionally, the team will operate a validator node, and self-bond Kira Tokens, in order to earn block rewards.
Q11: How will exchange users make money?
Users who are not validators and do not own the Kira Exchange Token (KEX) can bond any other stakeable asset and earn a corresponding share of block rewards, network fees, and exchange fees. Because staked assets are transferable in the form of delegation shares, users can generate passive income whilst trading, or simply holding, their assets.
Q12: Will there be a need for an exchange such as Kira so early in the evolution of the Cosmos ecosystem?
We believe in a multi-chain future, evolving toward a rich and diverse universe of interconnected blockchains. This vision implies not only the emergence of trustless bridges to the largest ecosystems (such as BTC and ETH) but also the emergence of thousands of new projects, developed using a range of SDKs, and built using reusable modules rather than by adapting legacy and monolithic codebases. In case of Cosmos, BTC and ETH bridges are almost complete and will be released toward the end of 2019, along with IBC.
Previous paradigms occurred first on various forks of PoW, then on the smart contact level. The new trend is Proof of Stake consensus and Internet of Blockchains, and this makes total sense from the perspective of developers who want to rapidly deliver blockchain apps that actually work and scale in real life scenarios. Which implies that in not so distant future, majority of tokens will be available or created within the IoB. Kira will allow for all those assets to trade in a fully trustless and permissionless manner.
It’s extremely important that PoS tokens have a trustless and permissionless access to the market, due to how the PoS consensus is secured - through the assumption that stake-able assets have value. If this value could NOT be possible to realize because centralized exchange began to delist PoS tokens, the PoS security of all those delisted tokens would be immensely decreased. For this reason, Kira is an essential part of sustaining the Proof of Stake paradigm.
Q13: So if a transaction is happening on Cosmos Zone for an asset originating from Kira, how will this process work?
Before any asset can be traded on the Kira Exchange it has to be sent through the IBC protocol into the Kira Hub, from where it can be sent into the exchange zone where trades will occur. From the user perspective, this process is fully abstracted.
Q14: When it comes to development of product there's a reason why people want to see competent teams having lots of funds for development purposes, with community fund in place you make sure that it is always possible to bring other developers into play through vote but when it comes to implementing big features that requires lots of time, and not everyone will be able to understand the benefit of them. What makes you think you will be able to persuade people to vote for that feature to get funding over stuff like fancy explorers and other minor improvements that only bring “aesthetics to the platform”, because more often than not people are focused on short term benefits?
Kira’s development team will also be employed under this onchain contract and initially will be responsible for the majority of those bigger features. While the smaller ones will be outsourced through the community fund as well. In addition, there’s going to be a code of conduct under which all governance bodies vote and decide how funds are distributed. You have to consider, that before the network fully transforms into enlightened democracy, where people are “chain conscious” and aware of issues like these, the network will be a technocracy, which implies that people with short term visions will unlikely enter a governance set
Q15: So all validators no matter how many tokens are staked will have equal voting power but rewards from exchange fees and block rewards gonna be proportional to staked tokens, correct?
Yes, except for the fees. The 50% of the fees goes to the validator that proposes the block and the rest goes to delegators but the funds that go to the delegators are distributed differently than block rewards. They are not proportional to your stake in regards to all coins staked. Your fee rewards are proportional to your stake bonded to the particular validator which is the similar way how it’s done in polkadot, it’s just a mix of both polkadot distribution (of fee rewards) and cosmos distribution (of block rewards).
Q16: Why do validators only get 50% of the exchange fees when they provide most of the leg work?
Kira believes that both delegators and validators have equally important roles. The delegators provide security and have to be incentivized, while validators operate the network for everyone to use. These roles are distinct, and are equally valuable. That's why we set that initial cosmological constant to be 50%. Governance set will always be able to decide upon any parameter, however, that’s why we have a code of conduct to ensure that things like that are not abused. It’s similar in case of cosmos network. If governance decides to change any variable, they could easily do it. It’s a default setting, however, the assumption is that this ratio would rather decrease than grow. There has to be a reasonable value under which the network starts operating. Such as supply of tokens, inflation, and hundreds of other parameters you set in the beginning. Although no one can guess how the market is going to react, it will definitely show us its expectations.
Q17: Will voting power be proportional to balance? Meaning, 1 wallet with 1 KEX will have exact same voting power as 1 wallet with 1 million KEX?
There are two cases where voting power applies, that is the governance and chances to propose new blocks by each validator. In both cases, Kira, validators and council members have an equal voting power, regardless of the stake bonded. Kira is a technocracy, aiming to evolve into the enlightened democracy governance system. This means that voting power is in the hands of people who have knowledge and skills, useful for the project - rather than those who only have wealth. Enlightened democracy is the case where the majority of actors become network conscious to the similar level as initial governance set but that’s a long term process of educating the user base.
Q18: So what prevents me from creating thousands of wallets with minimum balance with only one purpose to reject every proposal when its only address that counts as vote Users (stacke-able asset holders) are not automatically part of the governance set?
They have to be elected in accordance with the Code of Conduct, which they also have to follow once they are elected.
Q19: So the proposals can be made by anyone that have enough whitelisted fee assets to pay the transaction fee. The governance is what approves the submission, and votes can only be made by validators, which have equal voting power among them?
Yes, anyone can propose but the governance set is not just validators, it also consists of the council members, who are not validators but can vote on proposals.