Reserve
Learn how to use the Kolektivo Curaçao Reserve
GETTING STARTED
This short task list will help you getting started to use the Kolektivo Web App:
1) Add the Celo Network
The Kolektivo Web App is only available on the Celo Network. Before you perform any action on the Kolektivo Web App that require you to connect with your wallet, you first need to add the Celo Mainnet to your wallet settings.
A convenient way to do so is to use Chainlist:
Visit https://chainlist.org/
Search for "Celo Mainnet" in the search bar
Add the network to your wallet:
--> In case you are using Metamask wallet, simply select "Add to Metamask" and follow the instruction on the Metamask window that appears on screen.
--> In case you are using another wallet, please use the parameters you find on Chainlist to add the Celo network to your wallet by following the instructions specific to your wallet.
--> In case you are using the Kolektivo Wallet, the Celo network is already setup so you don’t have to do anything!
2) Connect your Wallet
In order to perform most actions with the Kolektivo Web App you need to connect your wallet to it.
Visit https://kolektivo.app/
Select "Connect Wallet" on the top right part of the screen
Choose the wallet you want to connect with. You need to have a compatible wallet set up.
--> The Kolektivo Web App connects to most Celo wallets, including Metamask and all wallets compatible with WalletConnect.
--> We recommend you to connect with the Kolektivo Wallet as it allows you to have a series of advantages.
Please note that you will need to fund your wallet with some CELO to pay transaction costs. Most wallets will give you instructions on how to acquire those tokens.
Introduction
The Reserve is the monetary entity of the community economy. In the context of the Kolektivo Minimum Viable Product (MVP), the monetary entity of the Curaçao community economy will be the Kolektivo Curaçao Reserve. Its corresponding token is the Kolektivo Curaçao Reserve Token (kCUR).
The Reserve is a custom creation of Kolektivo, enabling local communities to mint their own locally governable currency. It is an attempt to equip local communities with the capabilities afforded by monetary policy. On the Reserve interface, communities can at any time understand, track and analyse key values of their local reserve instance, enabling unprecedented transparency of the financial system. The Kolektivo Curaçao Reserve holds a variety of assets, used as backing to mint the Kolektivo Curaçao Reserve Token (kCUR). kCUR is a standard non-rebasing ERC-20 token that can be bought on the Reserve’s Primary Pool and used for the production of the community currency of Kolektivo Curacao: The Kolektivo Guilder. In the future, the Reserve token may be used for standard bonding or redemption transactions against the Reserve for whitelisted community members.
In the context of the Kolektivo Mininum Viable Product (MVP), the Reserve's parameters such as kCUR's price floor and ceiling are managed by the Kolektivo multi-sig.
Who is the Kolektivo Multi-Sig?
A Multi-Signature wallet is a common means to manage shared resources and enable collective action. The Kolektivo Multi-Sig is a Celo Safe managed by four core builders of the Kolektivo Framework. The Kolektivo Multi-Sig is responsible of the governance of a certain number of parameters of the Reserve.
The Interface
Overview
The overview page offers a perspective on two key parameters of the reserve: the reserve value, and the reserve assets.
Reserve Value
The Reserve value is the total value of the assets held by the Reserve, expressed in USD. Assets in the Reserve are only included in the Reserve value calculation if they are both held by the reserve and registered as a Reserve asset.
Reserve Assets
The Reserve assets section informs you about the assets that are currently held by the reserve, and their transaction history.
In the "Assets" subsection, each token held by the Reserve is listed, you can consult the following informations:
Token is the token held by the Reserve.
Price is the current price of the token.
Quantity is the number of this token that the Reserve holds.
Total Value is the total value of the token held by the Reserve (i.e. token price times quantity).
In the "Transaction History" subsection, you can consult a list of direct deposits or withdrawal that have been made in the Reserve. This enables you to consult all of the past interactions that have occurred with the Reserve.
Token is the token deposited or withdrawn
Type is the type of transaction (deposit or withdrawal)
Amount is the amount of the transaction
Address is the address that performed the action
Age is how long ago the transaction was performed
kCUR
Track kCUR's Key Values
On the kCUR page, you are able to track the following kCUR key parameters:
Price is the current price of 1 kCUR expressed in USD. You can track it either on the blue card, or in the “kCUR Price” section below the card. You can see that kCUR’s price is limited by a Price Floor and a Price Ceiling — both set by the Kolektivo Multi-Sig. The chart enables the analysis of kCUR price’s actions in regards to this ceiling and floor.
What are price ceiling and price floor?
A price ceiling is a limit to an asset's price While sometimes the ceiling is a hard cap, it can also be interpreted as a threshold after which further growth is progressively softened. In the case of kCUR, the price ceiling is the maximum desired value for 1 kCUR, defined as a multiplier of the price floor. When kCUR’s price exceeds the ceiling, further price increase is dampened by arbitrage opportunities. This ensures that kCUR does not experience unreasonable price growth beyond its backing value by minting additional supply when kCUR is purchased via the Proxy Pool.
Also known as "Intrinsic Value", a price floor is a limit to an asset's price. In the context of kCUR, the price floor is the true value of 1 kCUR independent of market speculation, defined as the amount of reserve value that currently backs 1 kCUR. When kCUR’s price falls below the floor, further price decreases are dampened due to arbitrage opportunities. This ensures that kCURs price does not spiral to 0 by creating incentives to purchase and drive the price up.
Total Supply is the total amount of kCUR existing. You can only track this parameter in the blue card.
Supply Distribution is the current distribution of kCUR over the Reserve, Mento, or circulating. It is a way to be aware of where kCUR’s supply is located. You can track and analyze this trend either in the blue card, or in the “kCUR Supply Distribution Over Time” section below, where a chart enables you to track the distribution over the last hour (1H), the last day (1D), the last week (1W), the last month (1M), or the last year (1Y). kCUR may be held by the Reserve, by the Mento instance, in the Primary Pool, or externally to Kolektivo. Being aware of kCUR’s supply distribution is a useful management parameter that enables it to conduct appropriate monetary policies.
Market Cap measures the relative size of a cryptocurrency: It is calculated by multiplicating the current market price of the token with the total supply of the token in circulation. You can only track this parameter in the blue card.
The Primary Pool
The Primary Pool engages with the Proxy contract, helping provide a price floor and price ceiling.
The Primary Pool (kCUR-cUSD) allows you to deposit cUSD in exchange of kCUR, and withdraw cUSD in exchange of kCUR. The exchange happens on a Symmetric Pool, that you can access by clicking on the right corner “Go to Symmetric Pool”.
How to exchange assets on the Primary Pool?
If you would like to know how to use Symmetric DEX, you can refer to this page of their documentation.
On the kCUR page, you are at all time able to track the following parameters of the Primary Pool:
Volume (24h) is the total volume of assets traded in the Primary Pool over the last 24 hours — given in USD. This parameter informs you about the market's interest in a particular symbol.
Total Value Locked is the total value of all the combined assets locked inside the Primary Pool. It is given in USD.
Fees is the sum of the Primary Pool’s collected fees over the last 24 hours. It is given in USD.
Risk
The Risk page makes you able to understand how risk-averse your Kolektivo community economy is. A classification assigned to assets describes how risky it is for the Reserve to hold it. Kolektivo has 3 risk classes:
High Risk: Any asset that has high risk volatility. In the context of the MVP, all other coins that aren't low or moderate risk are considered as high risk assets.
Moderate Risk: Any asset that has a moderate amount of price volatility. In the context of the MVP, CELO tokens are considered as moderate risk assets.
Low Risk: Any asset that has low price volatility. In the context of the MVP, all stable coins such as cUSD are considered as low risk assets.
Collateralization Risk
What is collateralization?
Collateralization is the degree to which a currency is backed by a group of assets. In our case, it is the degree to which kCUR is backed by Reserve Assets. We talk about collateralization ratio to describe the ratio of backing-assets to the currency being backed. In our case, it is the total value of Reserve Assets in ratio to the kCUR Fully Diluted Market Cap (i.e. total supply of kCUR times kCUR's current price). For example, if the Reserve is worth $100, and kCUR’s market cap is $200, the current collateralization ratio is 50%, meaning that kCUR is 50% backed by the Reserve.
The collateralization risk is the distribution of the Reserve value by asset risk class, over time. It is an important parameter that enables you to understand how risk-averse the Reserve is.
The chart under this section informs you about the collateralization risk of the Reserve. On this chart, you can read the following parameters:
High Risk refers to the total value of all high risk assets held by the Reserve. In the chart, this is represented in red.
Moderate Risk refers to the total value of all moderate risk assets held by the Reserve. In the chart, this is represented in orange.
Low Risk refers to the total value of all low risk assets held by the Reserve. In the chart, this is represented in blue.
Minimum Collateral represents the Minimum Collateralization Ratio (i.e. the desired minimum value of the Current Collateralization Ratio) converted in USD. If the Current Collateralization Ratio falls below the Minimum Collateralization Ratio, minting of kCUR is prohibited.
Fully Diluted Market Cap is a synonym to Market Cap. It is the Total Supply of kCUR times kCUR's current price.
What happens when the collateralization ratio falls below the minimum collateralization ratio?
Let's say that the minimum collateralization ratio has been set at 50%. Market fluctuations cause the current collateralization ratio to fall to 25%. Minting of kCUR would further increase kCUR’s market cap, meaning there would be even less Reserve backing for kCUR. Minting of kCUR is therefore prohibited to prevent the current collateralization ratio from falling further.
Risk by Asset
In this section of the Risk page, you can track the risk of each of the assets held by the Reserve. This enables increased precision in the analysis of the Reserve’s risk. The table lists the following parameters:
Token is the token held by the Reserve.
Risk Class is the risk class of the token based on liquidity. Low risk means that the token has high liquidity. Moderate risk means that the token has moderate liquidity. High risk means that the token has low liquidity.
Collateral Value is the USD value of the token. It is expressed as collateral value to describe to what extent it acts as collateral for kCUR.
% of the Reserve is the percentage of the Reserve that the token value represents.
What's Next?
In the future, the Kolektivo Reserve will add the following features:
Bonding and redemption interface: A mechanism t that allows the Reserve to acquire assets in exchange for the Reserve token at a presumably discount rate. This will enable to grow the Reserve value and decrease kCUR’s price, while incentivizing arbitrageurs to purchase the Reserve’s token directly from the Reserve, rather than the secondary market.
Governance: Badge holders will have write permissions in the interface.
Additional Reserves: As other Kolektivo communitiy economies spin up, there will be additional Kolektivo Reserves added to the interface.
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