Kresko 101
Last updated
Last updated
The overall documentation is in process of being updated to match the latest protocol architecture.
Kresko is a non-custodial, capital-efficient synthetic asset protocol that runs on the EVM. It facilitates the creation and management of securely collateralized synthetic assets using smart contracts written in Solidity.
The protocol allows whitelisted , the collateral is used to new , incurring debt that locks partial or full value of the collateral. The debt is repaid by the minted Kresko Assets out of circulation, unlocking the collateral backing it.
This general model is a (CDP). Kresko has two distinct CDP models complemented by the ability to acquire Kresko Assets outside borrowing, allowing anyone to engage in strategic action using a common ruleset and amplified liquidity.
An (ICDP) allows an account to create new Kresko Assets. Each account has control over the management and risk of the position, meaning it can be isolated with a single collateral and debt asset, or a diverse strategy with multiple assets.
The same and applies to all positions. of a position must be above the MCR to mint Kresko Assets, this ratio is directly increased by repaying debt or depositing more collateral.
The (SCDP) allows different accounts to deposit into a single position. These pooled deposits are utilized as liquidity for zero-slippage swaps where Kresko Assets can be exchanged to an equal value of another Kresko Asset.
The position concentrates the liquidity of Kresko Assets while liquidity providers and traders avoid the downsides of a regular AMM, such as slippage, impermanent loss and fragmented liquidity. Accounts can participate in the SCDP as a depositor, trader and/or a liquidator.
Kresko Assets can be directly created outside of a CDP if a reputable representation of the underlying asset exists on-chain. In this case, the underlying is "" to an equal amount of the Kresko Asset, which can then be unwrapped by burning the Kresko Assets.
For example, Kresko Assets borrowed using the ICDP can be exchanged to another Kresko Asset which translates to a short position on the borrowed asset.
Conversely, using KISS or synth wraps to obtain Kresko Assets which are further swapped using the SCDP allows any Kresko Asset to be acquired without borrowing that can be used to eg. open a long position on an asset.
Further, a bit advanced use-cases are things like price arbitrage, hedging strategies and extending or using the protocol with your own smart contracts.
Here is a list of topics to help understand how Kresko works.
Finally, the protocol includes a special stable asset, , to onboard stablecoins like USDC into the system without or risk.
You can also provide liquidity into the SCDP which is incentivized from the fees paid by traders. Another option is to perform in the protocol.
Interaction with the happens using an user-interface, an API or just by directly by sending transactions into the blockchain network. The is open source allowing anyone to build public user-interfaces or other integrations that use the protocol.
What is a CDP?
What are Kresko Assets?
What are Collateral Assets?
Depositing Collateral
Minting Kresko Assets
Liquidations
Withdrawing Collateral
Repaying Kresko Assets
KISS