Spotlight: ORCA by Kujira
Authors: @Kuji_Anon and @TheRealMrSwiss
ORCA, a dapp on the Kujira Blockchain, is the world's first public marketplace for liquidated collateral. Users can now participate in securing blockchain assets while receiving significant liquidation discounts.
ORCA is a platform that facilitates decentralized bidding on liquidated assets. Users submit their bids as a percentage discount and are placed in a queue, with bids being executed in order from the least to the most discount offered. During periods of high volatility, bidders could potentially receive significant discounts on their purchases.
Public users can visit ORCA’s platform and place bids with USK on various collaterals, including ATOM, DOT, wBNB, wETH, Luna, and gPAXG. More bid options will be added as additional USK collateral options become accessible over time.
After selecting the collateral bid market, users bid by submitting 1) a required discount for the collateral that's being liquidated and 2) the total amount of USK willing to be traded.
To highlight an example, suppose a buyer placed a $500.00 bid on ATOM for a 10% discount. If this bid is triggered, the buyer would receive $500.00 worth of ATOM at a 10% discount to the prevailing market price at time of liquidation. If the bid triggers when ATOM trades at $10.00, the buyer’s net purchase price per ATOM would be $9.00 ($10.00 * (1-10%)) instead of the prevailing $10.00.
This approach is versatile and can suit different investment strategies. For those seeking to maximize profit, discounted assets purchased on ORCA can immediately be sold at the (higher) prevailing market price on Kujira's FIN dex. Converseley, those aiming to accumulate assets over the long term can bottom-fish for discounted entry prices.
Currently, the liquidation bid markets have a limited depth. Despite being the biggest collateral pool with roughly $400,000 of USK minted, ATOM’s pool has only $65,000 worth of liquidation bids. Therefore, if the value of ATOM were to experience a notable decrease, most, if not all, of the current bids would be satisfied. The same trend is evident in most of the other dominant bid markets. There presents the opportunity to earn significant discounts on many of ORCA’s large cap collateral options. For example, LUNA’s collateral pool worth roughly $300,000 has only $11,000 worth of liquidation bids placed.
Theoretically, ORCA can help to minimize the effects of downward price fluctuations of purchased assets. By avoiding bots that buy liquidations and sell them right away for profit, ORCA allocates these assets to community members who may opt to retain them. If they choose to sell, the competitive market would lead to lower discounts, which would dampen sell pressure by reducing the incentive for instant profit.
In the vast and ever-expanding Cosmos ecosystem, ORCA stands out as an exceptional product with strong and reliable growth potential. We feel ORCA has yet to receive the attention it deserves, leaving savvy investors with a unique opportunity to take advantage of its considerable discounts on top-tier assets.