How does it work?

Created by Oron Heine, Modified on Mon, 30 Sep at 4:18 AM by Oron Heine

Kima takes a simpler approach to settlement security: If it’s not there it can’t be hacked. This means no smart contracts, no oracles, no external relayers to trust that can be compromised. So how are funds moved without smart contracts? The technical solution is comprised of three parts:

External accounts EOAs (Externally Owned Accounts) are native blockchain wallets acting as pools. The security benefits of this are immense: No need for smart contracts on every blockchain, You can’t DDoS a wallet, and everything related to cross-contract messaging is non-existent so this is not an applicable attack surface.

TSS and Trusted execution environments Using TSS and Intel SGX technology, keys are shared between different actors without them having direct access to these keys. This means we can allow more people to run these nodes and not be worried about keys being compromised.

Efficient Liquidity management High TVL numbers only tell part of the story. Liquidity protocols need to balance between the liquidity pools to ensure a high service level. In other words, it’s not only about how much money is stored, it’s also about distributing the liquidity in a way that will serve demand in the most effective way. Kima’s Liquidity Management (LiMa) algorithm manages supply and demand and maintains equilibrium using financial incentives.

Fiat Support To allow for integration between the old and new monetary systems, Kima also employs an opt-in compliance system on the protocol level, allowing decentralized solutions access to legacy systems like Fiat payments, Stocks and Bonds. This layer will perform all the necessary checks, including KYC, AML and KYT verifications to provide a compliant record that satisfies regulatory requirements.

Anyone building in Web3 can see the challenges that Web3 compatibility brings. Instead of perceiving these challenges as independent problems with no relation to each other, Kima understands that these are symptoms of the same problem.

Kima’s solution is the first compatibility layer that solves the problem, instead of treating the various symptoms that arise from it.