# KUMA Swap

The KUMA Swap is a core smart contract of the KUMA Protocol. Its parameterization is managed by the [KUMA DAO](/kuma-protocol/dao-and-governance/governance-process.md), 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.

## Fees

Following DAO [votes](/kuma-protocol/dao-and-governance/governance-process.md), a 'SellBondFee' is applied when an NFT is swapped for KIBTs.

|     | Ethereum | Polygon PoS | Linea | Mantle |
| --- | -------- | ----------- | ----- | ------ |
| USK | 0.01%    | 0.01%       | 0.01% | 0.01%  |
| FRK | 0.01%    | 0.01%       | 0.01% | 0.01%  |
| EGK | 0.01%    | 0.01%       | 0.01% | 0.01%  |

## Introduction to the KUMA Clone

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%.

{% hint style="info" %}
To learn more about the KUMA Clone concept click [here](/kuma-protocol/developers/smart-contract-architecture/kuma-bond-clone-tokens-kbct.md).
{% endhint %}

## Oracle for Central banks rates

For the tokens within the KUMA Swap, the KUMA Protocol receives Central banks rates.

{% hint style="info" %}
Read the [Smart Contract Architecture](/kuma-protocol/developers/smart-contract-architecture.md) to learn more about Central bank rates.
{% endhint %}


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.kuma.bond/kuma-protocol/kuma-protocol/composable-interest-bearing-tokens/kuma-swap.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.