KUMA Swap
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The KUMA Swap is a core smart contract of the KUMA Protocol. Its parameterization is managed by the , governed by MIMO token holders.
KUMA NFTs holders can swap their regulated NFTs for composable interest bearing tokens that can be used across the DeFi ecosystem.
In short, a KUMA NFT is swapped for a KIBT, KUMA Interest-Bearing Token. If multiple KUMA NFTs of the same risk category are swapped using the KUMA Swap contract, the associated KIBT would accrue interest following the lowest coupon of the KUMA within that risk category, or the rate of the central bank that manages the underlying bond, whichever is lowest.
There are multiple benefits of doing using the KUMA Swap smart contract:
This fractionalizes the KUMA NFT into smaller and fongible units.
The KIBT is denominated in the currency of the underlying bond that is backing the KUMA NFT.
This increase the composability of the tokens across the DeFi ecosystem.
Following DAO , a 'SellBondFee' is applied when an NFT is swapped for KIBTs.
USK
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FRK
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EGK
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The KUMA Protocol has been designed keeping in mind that it should be economically viable. Similarly to the interest being paid by the underlying bonds, the KUMA Protocol will derive its revenues from the variation of rates from underlying bonds of KUMA NFT.
Practically, this means that if at T0 a KIBT pays 5%, and that at T1 the central bank rates of that given underlying drops, the KIBT rate could be updated to 4%.
For the tokens within the KUMA Swap, the KUMA Protocol receives Central banks rates.
Read the to learn more about Central bank rates.