RUNE acquires Kujira: Can it recreate the DeFi “gold rush” fever?

Against the backdrop of the rapid development of blockchain technology, competition in the field of cross-chain transactions and decentralized finance (DeFi) is becoming increasingly fierce.

Recently, RUNE announced the acquisition of Kujira, which has attracted widespread attention.

Thorchain (RUNE) is known for its unique cross-chain transaction capabilities, allowing users to exchange native assets between different blockchains. This mechanism is implemented through the RUNE token, and users can freely trade between blockchains such as Bitcoin, Ethereum, Avalanche, etc. without relying on wrapped assets.

Thorchain's cross-chain exchange mechanism not only improves the security and efficiency of transactions, but also reduces the transaction costs of users. In particular, its multi-functional liquidity pool and "saver vaults" further enhance its market competitiveness, provide diversified income options, and thus attract a large number of users and investors.

At the same time, Kujira, the acquired party, as a member of the Cosmos ecosystem, has demonstrated its strong strength in the field of decentralized finance.

Kujira has built a Layer1 blockchain based on the Cosmos SDK, and its ecosystem includes a variety of products such as liquidity engines, decentralized exchanges (DEX), financial markets, clearing, stablecoins, and on-chain order books.

Kujira's ability to quickly adapt was fully demonstrated after the collapse of Luna in 2022. In less than six weeks, the Kujira team quickly built a brand new blockchain on Cosmos and launched a series of innovative products such as the decentralized exchange FIN and the automated market maker BOW. These products not only meet the diverse trading needs of users, but also greatly enhance the liquidity and stability of the ecosystem.

01 Success and Challenges of Kujira

Kujira's performance in 2023 was impressive, with its total locked value (TVL) soaring 1200% in one year. This achievement not only demonstrates Kujira's competitiveness in the DeFi market, but also reflects the strong appeal of its ecosystem.

Kujira's success is mainly reflected in the following aspects:

First, core products.

Kujira's ecosystem includes multiple decentralized financial products, such as liquidity engine, decentralized exchange FIN, automatic market maker BOW, financial market clearing system Orca, and stablecoin USK. These products build a complete DeFi ecosystem and provide users with diversified financial services.

Second, innovation ability.

The Kujira team has demonstrated strong innovation and market adaptability. After the collapse of Luna in 2022, Kujira quickly adjusted its strategy, turned to the Cosmos ecosystem, and launched a series of new products and services in a short period of time. This rapid response and innovation ability enables Kujira to remain competitive in a turbulent market environment.

Third, community governance.

Kujira maintains a high degree of transparency and decentralization in governance. All users holding KUJI tokens can participate in voting on governance proposals, which enhances community participation and trust. Kujira's governance model not only enhances community cohesion, but also promotes the healthy development of the ecosystem.

In terms of market performance, Kujira performed exceptionally well in the market in 2023, with the price of its token KUJI rising by nearly 400% in just three months. In addition, Kujira's TVL increased by 1,200% in the same year, demonstrating its strong appeal and stability in the market.

But despite Kujira's brilliant achievements in 2023, its road to success was not smooth. In 2024, Kujira experienced a series of serious challenges, the most notable of which was the liquidation of the foundation's operating wallet.

The following are several key factors that led to Kujira's decline:

First, improper management of leveraged liquidity.

The Kujira team decided to use part of the operating funds for leveraged liquidity provision to promote liquidity and activity in the ecosystem. However, due to the failure to properly manage these leveraged positions, when market volatility increased, there was insufficient collateral, resulting in automatic liquidation. This incident triggered a chain sell-off, and the price of KUJI tokens plummeted by 40%, from $0.97 to $0.57.

In addition, security vulnerabilities and attacks.

Kujira has also suffered a series of security vulnerabilities and social engineering attacks during its operations. These incidents not only affected the stability of the system, but also exacerbated market uncertainty and panic. Despite the team's efforts to maintain the security of the system, these attacks exposed its shortcomings in risk management.

In terms of market reaction, the liquidation event of the foundation-operated wallet led to panic selling in the market, further depressing the price of KUJI tokens. Some market participants even spread negative news on social media, claiming that Kujira was at risk of a "rug pull", which, although untrue, undoubtedly exacerbated market panic.

02 Strategic Integration

A major strategic consideration for RUNE's acquisition of Kujira is to enhance cross-chain transaction capabilities. By integrating Kujira's technology and products, Thorchain can further improve the efficiency and security of its cross-chain transactions.

Kujira’s FIN exchange and BOW automated market maker will provide additional liquidity support for Thorchain, allowing users to enjoy lower costs and higher efficiency when conducting cross-chain transactions.

In addition, Kujira’s liquidity engine and on-chain order book will be combined with Thorchain’s cross-chain exchange mechanism to provide users with more diverse trading options. This technical integration will not only improve the user experience, but also attract more users to the Thorchain ecosystem and expand its market share.

Of course, the acquisition of Kujira will also help Thorchain improve its governance and transparency. Kujira has always maintained a high degree of transparency in governance, and all users holding KUJI tokens can participate in voting on governance proposals. By learning from Kujira’s governance experience, Thorchain can further optimize its governance structure and enhance community participation and trust.

At the same time, Kujira's Operational DAO will play an important role in managing the treasury and core protocols. Thorchain can learn from this model and establish a similar governance body to strengthen the management of funds and protocols to ensure the stability and security of the system. This improvement in governance and transparency will help Thorchain maintain its leading position in the fierce market competition.

Summary

RUNE's acquisition of Kujira marks an important integration in the blockchain and DeFi fields.

This acquisition will not only enhance Thorchain's cross-chain transaction capabilities and market competitiveness, but will also provide Kujira with more development opportunities and technical support. Through the cooperation between the two parties, Thorchain and Kujira will jointly promote the innovation and progress of blockchain technology and the DeFi market, and build a more transparent, fair and sustainable financial ecosystem. This cooperation will have a far-reaching impact on the entire blockchain industry and bring more convenient and secure financial services to users.

The combination of RUNE and Kujira is not only a fusion of two major technological advantages, but also a synergy of two distinctive ecosystems in the market. In the future, the cooperation between Thorchain and Kujira will not only stay at the technical level, but will also promote innovation and development in the entire DeFi field, and open a new chapter for the application and popularization of blockchain technology.