What is Vulkan and what is its purpose?
Vulkan was born out of necessity, to provide the market with a real privacy-oriented DeFi ecosystem. Originally derived from the Monero codebase, Vulkan shares the same privacy and mining features as Monero with additional support planned for cross-chain compatability and staking.
Uniqueness and first in its league
What makes Vulkan truly special is its ecosystem. VectorSwap, VulkanPay and its own
overcollateralized stablecoin USDV. Backed by a team of highly experienced developers
in the decentralized finance space, VectorSwap is planned to act as a bridge between
private and non-private blockchains, subsequently enabling USDV minting, burning and
payments on the Ethereum ERC-20 and BNB BSC-20 blockchains. USDV does not inherit
the untraceable properties of Vulkan (VUK) by default on smart contract capable
blockchains, but the VulkanPay wallet offers an option to anonymize transactions to a
certain degree using an output mixing mechanism. This feature allows semi-private peer-to-peer transactions while remaining compliant with regulations.
Why Vulkan serves a real purpose in the market
Vulkan is the first project to bridge the gap between natively private proof-of-work
blockchains and tokenized assets on smart contracts capable blockchains. This would be
done with the help of VectorSwap, a decentralized exchange responsible for minting,
burning, staking and moving assets across different blockchains. A wrapped version of
Vulkan (wVUK) is planned for some time in 2025, followed by the launch of USDV.
Below you can see a table comparing the 3 core elements of a stablecoin in the team's view.
Explaining USDV overcollateralization
Previously projects have attempted to create a private stablecoin backed by its own base coin. This lead to the well known Terra Luna UST disaster, however, the fundamentals have changed with each iteration of trying to create such a stablecoin. UST as well as others failed due to hyperinflation in the underlying backing collateral.
Others have adopted a Proof-of-Work base token as collateral that cannot be minted out of thin air causing hyperinflation and inevitably depegging. In this situation the sacrifice is scalability, speed and depegging in case the base coin loses its use case and value driving incentives, but this may still be a safer option than centralized alternatives with unaudited collateral.
In Vulkan USD (USDV)'s case the team plans to adopt a derivative mechanism of DJED. Users locking VUK as collateral for USDV will earn yield from mining block rewards and fees; the collateral can be unlocked at any given time while the collateral ratio is at least 400% or 4:1, when collateral drops below the 4:1 rate no more USDV can be minted, incentivizing locking VUK as collateral to earn yield passively. At a ratio of 800% or 8:1 providing VUK as collateral is no longer possible until the ratio falls back under 8:1 collateral.
The price of USDV will determined by our data oracle derived from existing implementations with more precise clarification available as launch approaches.
TL;DR Conclusion
To keep it simple and less technical, Vulkan (VUK) and Vulkan USD (USDV) are in a unique position. At the time of publishing being the only overcollateralized, Proof-of-Work backed, low fee, scalable and private stablecoin ecosystem while capable of being regulation compliant.
Published 04/03/2025
