PARITY INDEX is Kusama’s new defi and entertainment hub.

Check out the product here here.

It is built on a protocol that enables the tokenisation of crypto, traditional finance and real world rivalries through a new defi primitive we call ratio markets.

Ratio markets let users take pure relative performance positions isolated from broader market performance. In built incentives reward users and hodlers who back successful underdogs early.

They are a new coordination primitive for communities, empowering epic David vs Goliath contests - turning early conviction into potentially unlimited upside. 

The aim is to productise the user emotion: “I believe the underdog can close the gap”.

The launch/proof of concept rivalry is Kusama vs Polkadot market capitalisation.

The ticker for testing purposes is $PARITY.
For mainnet launch it likely to be $KVP (TBD).

2. How the Kusama vs Polkadot rivalry works

$PARITY's price rises when Kusama’s market cap gets closer to Polkadot’s, whether KSM or DOT move up or down in the broader market.

Users can mint / burn tokens using dUSD, KSM or DOT driving demand.

A % of each mint/burn is directed to the protocol's NAV Vault.

Bonuses incentivise backing an underdog early and hodling long term.

3. Why the Kusama vs Polkadot market matters

To date, the Polkadot ecosystem has spent over $200m through treasury spends.

There has never been a single objective metric to benchmark impact, leading to wasteful spending, populist agendas and steadily degrading culture.

The W3F's desire to optimise treasury spending around strong, outcome driven frameworks is a good policy, but the devil, as always, is in the details.

Since both Kusama and Polkadot's ability to spend is both enabled and constrained by their marketcaps, we can use the ratio of their valuations as a way to benchmark ecosystem performance over time.

By isolating relative performance, from absolute performance, we can force both ecosystems into adapting towards more collaborative and focused cultures, optimising against a single shared outcome that aims to inspire a combination of experimentation and commercial realism.

4. Protocol

The underlying protocol is live on Paseo (Passet Hub) and has been developed specifically for Kusama Asset Hub’s soon to launch EVM environment.

It is a modular, market-agnostic system with the following core innovations:  

• Ratio markets: synthetic asset backed tokens that track the ratio of two independently verifiable data points.  

• Minting/burning via KSM, DOT and dUSD (Kusama’s native, regulated, yield bearing stablecoin). 

• Efficient trading execution using a Proactive Market Making algorithm.

• DEX that sources liquidity directly from the reserve vault to bootstrap Kusama native defi.

• Dynamic NAV Vault bonuses: A personalised % of every mint and burn funds a bonus pool that rewards conviction and holding time. 

• Oracle system for secure price feeds with multi-operator consensus and outlier detection.

• dUSD on/off ramps via Bloque's soon to launch API which abstracts Brale's underlying stablecoin issuance platform and ramps.

5. On-Chain Rivalries

The project evolves prediction markets, using economic incentives to align collective interest, with the potential to create any ratio market based on independent and publicly verifiable data feeds:

• Crypto centric: Bitcoin vs Gold, Ethereum vs Bitcoin, Solana vs Ethereum
• Traditional markets: Microsoft vs Apple market cap, Intel vs Nvidia market cap
• Sports: Team A’s performance vs Team B’s performance
• Film: Movie A ticket sales vs Movie B’s ticket sales
• Music: Artist A streams vs Artist B’s streams
• Platform: Streaming platform A subscribers vs Streaming platform B subscribers
• Politics: Political party A members vs Political party B members

6. Development Status

The protocol is currently live for testing on Paseo - it is a proof of concept. 

Core logic/rebalancing system, contracts, and UI are in active development. 

A full audit of the system and its contracts will be done ahead of mainnet release. 

Community input/comment and testing is encouraged.

The protocol and contracts will be fully open sourced.

6. Commercialisation & Compliance

The protocol will be fully open sourced - anyone can launch their own ratio markets platform.

A new Kreivo base DAO will launch the Kusama vs Polkadot ratio market (and future markets), commercialising the underlying protocol whilst maintaining compliance.

This DAO will receive a % of fees generated by the markets it curates and launches.

7. Strategy

The project is the first in a series of parallel incubated initiatives focused on driving adoption of Kusama's:

• Asset issuance platform (Asset Hub)
• Organisational infrastructure (Kreivo)
• Native, regulated, yield generating stablecoin (decent/dUSD)

Unlike USDC/T, dUSD recirculates yield directly back into Kusama ecosystem innovation and development through Decent Partners' performance revenue sharing agreement with Brale.