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 consisting of rich and diverse universe of interconnected blockchains. This vision implies not only the emergence of trustless bridges to the largest ecosystems (such as Bitcoin and Ethereum) 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, Bitcoin and Ethereum bridges are almost complete and will be released toward the end of 2019, along with the IBC protocol.
Looking back at the development of the blockchain ecosystem, the first round of innovation came about via multiple forks Bitcoin's Proof of Work consensus (e.g. Litecoin) and then later, at the smart contact level, with the launch and adoption of Ethereum.
However, as the vision for the Internet of Blockchains gains traction, developers preference is now shifting toward Proof of Stake consensus and corresponding SDKs from Cosmos and Polkadot. This modular approach makes sense from the perspective of engineers who want to rapidly deliver blockchain application that can scale to address real world problems. All of this implies that, in not too distant future, the majority of tokens will be available or created within the this interconnected ecosystem of PoS blockchains. Kira will allow all those assets to trade in a fully trustless and permissionless manner.
Due to the way in which Proof of Stake consensus is secured, it's critical that PoS projects have access to at least one exchange so that a fair market value for the project's native token can be established. Because centralized (and decentralised) exchanges are able to arbitrarily delist tokens, the security of any PoS project can quickly be called into question. Because we offer an entirely permissionless listing process and provide censorship resistant access to the market, Kira aims to play an important role in securing the emerging Proof of Stake ecosystem.
Q13: If a transaction occurs on a Cosmos Zone involving an asset originating from Kira (or vice versa) how does this work?
Before any asset can be traded on the Kira Exchange, it must first be sent via the IBC protocol to the Kira Hub, and from there, it can be moved onto the specific exchange zone where trading will take place. From the user's perspective, this process occurs seamlessly and is entirely abstracted away.
Q14: Via the community fund, users can vote to incentivise developers to contribue tooling to the Kira ecosystem, but what about the core functionality of the platform itself? This sort of engineering tends to require significant time commitment and a cohesive vision for the future of the project. Given that not everyone will understand the benefits of any given feature, how will you persuade users to vote in favor of complex technical proposals rather than quick wins (e.g block explorers)?
All on-chain contracting, for features both large and small, will indeed be conducted via the community fund. However, there will be a code of conduct under which all 'governance bodies' within the Kira ecosystem will vote in order to decide how these funds are allocated. Consider that, before the network reaches its 'enlightened democracy' phase (where all participants are 'chain conscious' and aware of the broader issues) the network will effectively be a technocracy, implying that individuals lacking long term vision will be unlikely to enter the governance set.
Q15: So all validators (no matter how many tokens they're staking) will have equal voting power, but rewards from exchange fees and block rewards will be proportional to the quantity of tokens staked. Is this correct?
Yes, except for fees. 50% of fees go to the validator that proposes a block (the rest go to delegators) but rewards received by delegators are distributed differently to block rewards. Fee rewards are proportional to stake bonded to a particular validator, which is the similar to Polkadot. Essentially, Kira uses Polkadot's approach to distributing fee rewards but applies the same approach to block reward distribution as Cosmos.
Q16: Why do validators recieve only 50% of the fees rewards when they do the majority of the leg work?
We believe that both delegators and validators have equally important roles. Delegators provide Kira's underlying network security and must be properly incentivized, but on the other hand, validators operate the platform for everyone to use. These roles are distinct but equally valuable, which is why we set initial 'cosmological constant' for the reward split to be 50%.
The Kira governance set will always be free to modify any network parameter, and our code of conduct helps to ensure that this process is not abused. The Cosmos Network operates in a is similar fashion; if governance decides to alter a network variable, the change can be actioned via the submission of a proposal and a subsequent vote.
There is an assumption that this 50% ratio will be more likely to decrease than increase, but there must be sensible initial values in place when the network becomes operational (such as supply of tokens, inflation rate, and many other parameters). Although no one can guess how the market will react, it will certainly show us its expectations.
Q17: So voting power will not be proportional to balance? E.g. 1 wallet with 1 KEX will have the same voting power as 1 wallet with 1 million KEX?
There are two situations where voting power applies; the first is governance voting, and the second informs the probability that a validator will have the right to propose a new block. In both cases, Kira validators and council members will have equal voting power, regardless of stake bonded.
Kira will begin as a technocracy but aims to evolve into an 'enlightened democracy' system of governance. This means that voting power should ultimately rest in the hands of those who have knowledge and skills that are useful for the project, rather than simply those who have the most wealth. Enlightened democracy is a state of affairs where the majority of network actors are both educated and motivated in a way that is similar to the initial governance set. This is likely to be a long term process.
Q18: What prevents me from creating thousands of wallets, each with a minimum balance, and using them to reject every proposal?
All members of the governance set must be elected in accordance with our Code of Conduct, and must adhere to these rules once elected.
Q19: So proposals can be made by anyone with enough whitelisted assets to pay the transaction fees, and when submitted, the governance process either approves or denies based on votes by validators, all of whome have equal voting power?
Anyone can generate a proposal, but in addition to validators, the governance set also consists 'council members' who are not validators but can also vote.