USD-pegged Vaults: Setbacks and Next Steps

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Up 1

I think moving forward with aUSD as a vault collateral type is prudent. It is not perfectly stable, wandering by up to 20% but it is overcollateralized and therefore shouldn't collapse.

I waited for a year for a Ledger app update to handle NFTs, so I wouldn't hold my breath for a Ledger (USDT Statemine) solution.

My priority order of these four choices is:

  1. aUSD
  2. USDC via Moonriver (likely best long-term solution)
  3. USDT via Statemine
  4. USDC via Wormhole

Plus, the sooner we introduce the first stable coin vault, the sooner we can introduce LKSM vaults which seems even more valuable personally.

Up 3

Using uncollateralized wrapped stables like USDCx, anyUSDC, mmUSDC (nomad) may seem like juicier propositions due to higher liquidity- but they are chain idiosyncratic forms of stablecoin bridged but uninsured.

Thematically this seems counter to kBTC's raison d'etre - by accepting forms of collateral that our project suggests to reject (e.g. how wrapped is bringing BTC to polkadot on statemint very soon

Using a kusama native stablecoin is a better philosophical fit for our protocol and forms a better narrative.

My assessment of technical risk is as following (lowest to highest):

  1. USDT via Statemine
  2. aUSD via Karura
  3. USDC via Wormhole on Karura
  4. USDC via Nomad/anySwap on Moonriver

However despite this I would probably prefer aUSD over USDT, simply because the former has a higher issuance on Kusama: 4.18 Million vs tether's 500k. Ledger applications typically take 6 months+ to come out, so we may be waiting a long time for more USDT to become available.

aUSD's wobbly peg is certainly more of a risk when dealing balancing vaults, so the risk parameters chosen should reflect this.


Up 1

I wholeheartedly agree with Timbo here. Plus, since the inception of a 4Pool on Zenlink (Moonriver and Moonbeam), AUSD is a lot more liquid and less likely to depeg.


Overall i like the idea of using aUSD as you mentioned it supports ecosystem growth. In terms of it helping Kintsugi grow i think it will be limiting.

To acquire aUSD on Kusama you have to get it from Karura either by collateralising assets and minting it or trading it on a Dex.

  1. Minting it: You need to collateralise KSM/LKSM or KAR so this is kind of counter productive for a vault operator as you may as well just use the KSM and put it straight in the vault and use as collateral directly

  2. Trading it: The liquidity as you mentioned is so low, even obtaining $50k of ausd on Karura causes a 17% slippage [Worse on zenlink] so this is pretty impractical to do at scale for vault operators and sadly the ausd on kucoin can only be used on Acala.

Overall i think it would be good to have purely for an ecosystem integration angle with the longer term aim to be the wormhole. Hopefully this should bode better on interlay with a more liquid aUSD (although not massively)



Dear Kintsugians,

Genshiro DeFi would like to propose adding its native decentralized stablecoin EQD as collateral for minting kBTC.

Just as a background, Genshiro DeFi is a one-stop DeFi platform to earn, borrow and trade at max efficiency. Genshiro is Equilibrium’s Kusama-based canary network, which won its parachain auction on Kusama late last year. One of Genshiro's killer feature being its fully on-chain orderbook DEX which allow users to margin trade in decentralized manner while enjoying features that CEXs offer.

As a fellow DeFi protocol on Kusama Network, we are keen to bring the decentralized version of wrapped BTC – kBTC to our ecosystem, and would like to see it flourish.

On this note, Equilibrium would also like to propose adding EQD as collateral for minting iBTC on Polkadot as soon as Equilibrium is ready to go live (estimated to be 2 – 3 weeks from now).

Proposal to add EQD as collateral for minting kBTC:
· Readily available, can be transferred without hassle upon completion of XCM integration
· Decentralized, asset-back, overcollateralized stablecoin
· DotSama native asset, would encourage synergetic growth of both ecosystems

· TVL is low at the moment (~300K EQD minted on Genshiro at the moment). However, Genshiro has put up a treasury proposal to request KSM liquidity as the initial liquidity injection to our money market pool and DEX (link: If it passes through voting, we should see an increase in overall platform usage and EQD’s liquidity.
· EQD is only listed on Genshiro’s (and soon on Equilibrium’s) DEX, but not on any centralized exchanges.

We very much appreciate feedback from the community on this proposal. Thanks!


Update on USDT:

  • Tether needs Ledger support before minting
  • Ledger integration is still not 100% finished. We have been told that it is high priority at Parity (was planned to be done last week but something did not work out as expected).

"Should not take too long" is the current status, so still in line that it might be ready in July as we heard before.