Over the last 12 months there has been an explosion regarding a specific application of blockchain technologies: DeFi.
Since the inception of projects like COMP (compound.finance), LEND (aave.com), YFI (yearn.finance) and UMA (umaproject.org), there has been a spring of many different technologies regarding DeFi platforms where anyone could deposit a portion of its portfolio assets and have some interesting yields in return. The problem of those platforms could be summarized in just one word: LIQUIDATION.
Liquidation of assets is a concept directly related to the more used-to financial term of debt and credit. When you ask for a loan you are creating debt and, at the same time, you're using credit, which eventually derives in the creation of more money flowing into the economy. DeFi is all about having the possibility to access different instruments of credit without having to go through all that bureaucratic pain-in-the-arse applications and verifications that are always centralized via a financial institution (i.e., a bank) and which take a lot of time to be delivered successfully, making it a very costly process to endure and that could jeopardize the opportunity of an investment plan or strategy.
So, the question about "who's going to verify if someone is subject to being credited?", usually done by a bank, has now a different answer that implies every single person who provides liquidity to the different pools were the assets can be invested (via staking or any other action-concept permitted by the chosen platform). Moreover, what if the tokens/assets invested are ment to fulfill a fundraising event created by a different project who wishes to either be a benefactor and build a startup with the funds raised?
In the case of KIRA Network, it uses an innovative approach called "Initial Validators Offer" (IVO), which is a "crowdfunding mechanism where investors place their existing tokens or assets at stake using one or many PoS networks to “interchain-mine” a new token instead of liquidating their valuable assets to acquire new, highly speculative tokens". That means that investors delegate their token/asset to validators, receiving a newly minted token/asset for that, which is "interchain-mined" and then pegged to their old token/asset value, making it a 1:1 collateral insurance and exchange rate.
What this IVO means is that investors maintain full custody over their existing tokens/assets, while “interchain-mining” new assets in exchange. Furthermore, IVO projects are coerced to deliver on their promises because if investors get disappointed with their progress they can re-delegate all their assets to other validators at any time, without losing any value in the process of doing that.
The delegation of tokens/assets to validators is a critical and vital part of the underlying security of KIRA Network. As a delegator, having your tokens/assets staked amongst a series of validators gives you a set of unalienable rights such as being able to participate in consensus, governance, and earn yield rewards.
Finally, a key concept: FULL CUSTODY. Investors keep the full custody of their tokens/assets, while being rewarded with new tokens/assets for their investment (delegation) and validators have to do their utmost possible effort to reward their delegators in the best way possible, to keep their contract up and running.
If you have further questions regarding how KIRA Network actually does things differently, feel free to go to their website (https://kira.network/), medium (https://medium.com/kira-core/) and social media channels. Also, if you have further questions regarding the underlying protocol used by KIRA Network (COSMOS), feel free to check their official blog here: https://blog.cosmos.network/.
