Karura (KAR) functions as a comprehensive decentralized finance (DeFi) hub and stablecoin system constructed on Kusama (KSM) with integration into Polkadot (DOT). The Acala Network developed Karura; this team has secured four Web3 Foundation grants and established the Substrate Developer Academy.

Investment firms such as Coinbase Ventures, Pantera Capital, Polychain Capital, and Hypersphere support both Karura and Acala. These two projects run concurrently: Karura delivers DeFi services on Kusama just as Acala provides them on Polkadot. Built on nearly identical code, both platforms aim to offer fast, scalable, and user-friendly cross-chain DeFi environments for their respective networks.

As a parachain, Karura enables the development of efficient, affordable, and sophisticated financial tools, which helps reduce time expenditure and boost trading performance.

The ecosystem features a multi-collateral stablecoin supported by cross-chain assets known as kUSD, a trustless staking derivative called liquid KSM, and an automated market maker (AMM) decentralized exchange (DEX) designed to release liquidity and foster financial advancement.

Serving as the DeFi center for Kusama—a multi-chain network focused on early-stage Polkadot deployments and radical innovation—Karura acts as the sister network to Acala. It supports multichain liquid staking token (LST) protocols like liquid KSM (LKSM), an AMM DEX, and a highly customizable, EVM-compatible application platform built on Substrate. Secured by Kusama, Karura operates as the liquidity entry point for Kusama parachains, Acala, and L1/L2 blockchains.

The Karura project was established by the same group responsible for the Acala Network: Ruitao Su, Bette Chen, and Bryan Chen.

Ruitao Su serves as a co-founder of Acala and is the current CEO of Laminar Protocol. Previously, he held the position of CTO at Centrality. Su is recognized as an award-winning software engineer, entrepreneur, and investor, while also acting as an advisor to various tech companies and startups.

Bette Chen acts as a co-founder of Acala Network and the COO of Laminar. An experienced product manager and entrepreneur, she possesses academic credentials in both software engineering and business (MBA). Chen brings 10 years of experience in managing products within the software and high-tech sectors.

Bryan Chen is also a co-founder of Acala Network, in addition to being a co-founder and CTO of Laminar. He is noted as a significant contributor to the Substrate codebase and serves as a Polkadot Ambassador.

The Acala team ensures that all technological updates and developments reach Karura prior to any other Polkadot platforms. Consequently, Karura users are positioned to be among the first to utilize new DeFi technologies.

Karura features the Karura Dollar (kUSD), a stablecoin pegged 1:1 to the U.S. dollar. This allows users to safely swap KSM for a stablecoin or other assets like Bitcoin, eliminating the necessity to transfer KSM tokens to Binance.

For those who wish to earn staking rewards without participating in auctions, Karura provides a liquidity protocol for KSM tokens. Users can swap KSM for LKSM via this protocol; LKSM is a liquid token that incorporates the annual percentage yield from staking. However, users must wait seven days to unfreeze their tokens.

The platform includes a multi-coin wallet, support for non-fungible tokens (NFTs), integrated bridges such as renBTC and polkaBTC, borrowing capabilities, and various oracles.

A key benefit of Karura is the ability to run hundreds of DeFi strategies within the platform. Users can employ cross-chain tokens like BTC or ETH to secure self-service loans in kUSD, earn fees by supplying liquidity to the Karura DEX, and gain rewards through an unlocked, liquid KSM staking derivative while maintaining liquidity.

In summary, the Karura DeFi Hub on Kusama provides liquid KSM (LKSM) staking, a decentralized exchange, an algorithmic stablecoin, and a fixed KAR token supply.

Karura operates as a DeFi-focused blockchain secured by KAR, a utility token capped at a maximum supply of 100,000,000. The value of KAR is supported by a specific amount of reserved ACA tokens.

The distribution of the total supply is divided into four main groups: 60.87% for the community, 10% for the founding team, 10.08% for backers, and 18.33% for early backers. The portion designated for the community is further split into 34% for the auction reward and liquidity program, 10.25% for the reward reserve, 5% for ecosystem development, and 11.62% for the treasury/reserve.

Those who participate in the parachain auction receive KAR tokens as rewards. Upon receipt, 30% of these tokens are immediately unlocked and transferable, while the remaining 70% vests over a period of 48 weeks.

KAR serves six primary functions: paying transaction fees, incentivizing nodes, enabling governance, facilitating algorithmic risk adjustment, and supporting both pallet and smart contract deployment.

Karura does not support smart contracts, yet it leverages the Ethereum Virtual Machine (EVM) for security purposes. Additionally, by deploying on Kusama, the network benefits from Kusama's plug-and-play security infrastructure.

As of June 2021, you cannot purchase KAR tokens on any cryptocurrency exchanges. Instead, users are able to experiment with Karura's decentralized applications (DApps) via the Mandala testnet.