USK Interest Rate Hike Phase Update

RUJI Lending, and with that CDP Loans, is now live on Rujira. This is the next iteration of Kujira’s Ghost and opens the path toward the release of the long anticipated RUJI Liquidations, previously known as Orca on Kujira, enabling fair and democratized liquidations.

With this launch, you can now use native BTC, ETH, XRP, BCH, DOGE, LTC and soon other assets as collateral and borrow against them.

Once the Credit Account bug bounty competition with @Code4rena is completed on January 16 and borrowing caps are relaxed, users will have alternatives for most assets and can begin migrating their positions to Rujira. This will also mark the beginning of the interest rate hikes phase of the USK stablecoin on Kujira.

More details about the launch of RUJI Lending and its different phases can be found here:

⚡️The Plan

With CDP loans live on Rujira and once the bug bounty competition is completed, we will begin increasing USK interest rates as part of the plan communicated in the early days of Rujira.

This applies to all markets except MNTA. @LiquityFinance has a special agreement to use 50 percent of its revenue to buy USK until its remaining debt is fully repaid or USK returns above $0.90.

The goal of increasing interest rates is to encourage users with active USK debt to repay their positions and migrate their loans to Rujira. This should create buy pressure on USK and help move the price closer to peg, although there is no guarantee the peg will be regained.

Higher interest rates will also speed up liquidations due to the increased accrued interest, requiring USK to be purchased to liquidate collateral on Orca. This is most likely to affect positions held by users who are no longer active or who have lost access to their wallets.

We want to emphasize that ultimately, the value of USK and its peg are determined by the market and remain outside of our control. We strongly advise the community to plan accordingly.

⚡️Timeline

The timeline for the interest rate hike phase for USK is as follows:

• On January 16, when the bug bounty competition for Credit Accounts and Lending Vaults is expected to conclude, the USK interest rate will increase from 1% to 10%.
• Starting February 16, the interest rate will double each month until it reaches 80% by April 2026.
• Once 80% is reached, the rate will remain at that level until at least the end of June 2026, after which it will be reassessed.

Planned interest rate schedule:

• January 16: 10% interest rate
• February 16: 20% interest rate
• March 16: 40% interest rate
• April 16: 80% interest rate
• May 16: 80% interest rate
• June 16: 80% interest rate

⚡️Migrate your assets and positions

The Kujira chain will continue running as long as validators remain active.

However, we strongly encourage anyone who still holds assets there to migrate them to Rujira as soon as possible, as for some assets deposited on Kujira we depend on other projects and relayers to keep the bridge open, which may eventually make it impossible to bridge assets back.

Kujira and Rujira being non-custodial, decentralized systems, migrating your loan to Rujira is unfortunately not something we can do for you, which means that any open debt positions on Kujira must be handled manually. This requires you to close your position on Kujira, bridge your assets to Rujira, and then reopen the position there.

More information about bridging your assets back to their native chain or to Rujira can be found here:

⚡️Next steps

It has been almost 1.5 years since the vote to discontinue Kujira, merge multiple teams into Rujira, and become the App Layer on THORChain. The hicking of USK interest rate is the final step on the Kujira side and helps bring this chapter to an end, allowing us to fully focus our efforts and resources on Rujira.

Many lessons were learned while building Kujira. These have already been incorporated into Rujira and will continue to shape its development. This includes lessons learned from USK, which will form the foundation for a future stablecoin on Rujira, one that is fully backed and overcollateralized by Bitcoin.

More details on that will be shared at a later date.