KaleidoFi is the first decentralized insurance protocol for Liquidity Providers (LPs) on Stellar, designed to solve the single most persistent problem in DeFi: Impermanent Loss.
Providing liquidity to Automated Market Makers (AMMs) is the cornerstone of decentralized finance. Users deposit their assets into pools to earn trading fees, powering the entire ecosystem. However, this yield comes with a painful, often misunderstood risk: Impermanent Loss (IL).
IL is the financial loss a user experiences when the price of their deposited assets changes compared to simply holding them. It's a silent killer of returns, turning profitable-looking APYs into real, tangible losses. This risk deters new capital, complicates yield strategies, and represents a massive, unaddressed market gap.
KaleidoFi transforms this risk into a tradable, insurable event. We introduce a symbiotic, two-sided marketplace that creates a new layer of security and capital efficiency for the entire Stellar DeFi ecosystem.
LPs can deposit their AMM LP tokens (e.g., from Soroswap or StellarX) into the KaleidoFi Vault. By paying a small, dynamic premium in our native KALE token, their position is insured. If their impermanent loss exceeds a predefined threshold upon withdrawal, our Insurance Pool automatically compensates them, turning a potential loss into a predictable, protected yield.
Any KALE token holder can become part of the solution. By staking their KALE into our Insurance Pool, they provide the capital that underwrites the insurance policies. In return, they earn the collective premiums paid by all LPs in the protocol, generating a real, sustainable yield based on the health and activity of the Stellar DeFi market.
Our vision is to make providing liquidity as safe and predictable as staking. By creating an essential financial primitive—a decentralized hedge against IL—we aim to unlock billions in new, risk-averse capital, deepen liquidity across the Stellar ecosystem, and establish a new standard for secure, composable yield generation.
- 🛡️ On-Chain Impermanent Loss Insurance: The first protocol on Stellar to offer a direct hedge against IL for AMM LPs.
- 💰 Dual-Sided Yield: LPs earn protected trading fees, while KALE stakers earn real yield from insurance premiums, creating a circular protocol economy.
- 🔮 Real-Time Oracle Integration: KaleidoFi is powered by Reflector, a decentralized oracle network. We use their live, on-chain price feeds to accurately calculate impermanent loss and trigger payouts in a fully automated and trustless manner.
- 🧩 True Composability: Our protocol is a prime example of DeFi's "money lego" ethos. We compose existing Stellar assets (LP tokens), a vital service (Reflector oracles), and our own utility token (KALE) to create an entirely new, value-additive product.
KaleidoFi is built on a robust, cutting-edge technical foundation to ensure security, performance, and scalability.
- Smart Contracts (Soroban & Rust): Our entire protocol logic—the Vault, the Insurance Pool, and the KALE token—is built using Soroban, Stellar's next-gen smart contract platform. We chose Rust for its unparalleled safety, performance, and reliability in building financial-grade applications.
- Frontend (React, TypeScript, Vite): We provide a sleek, intuitive, and highly responsive user interface built with modern web technologies. Our dApp offers a seamless user experience, from wallet connection with Freighter to one-click transaction signing.
- Deployment: The entire protocol is deployed and fully operational on the Stellar Futurenet, ready for live demonstration.
Our demo video showcases the full, end-to-end user journey, proving that KaleidoFi is a functional, working MVP:
- Connecting the Wallet: A seamless, one-click connection to the Freighter wallet.
- Insuring a Position: A liquidity provider deposits their LP tokens, pays a KALE premium, and receives on-chain insurance.
- Staking KALE: A KALE holder stakes their tokens into the Insurance Pool to begin earning yield.
- Transaction Signing: Every core action constructs a valid Soroban transaction and prompts the user for a secure signature via Freighter, demonstrating a true, non-custodial Web3 experience.
KaleidoFi is not just an idea; it's a working prototype of the future of secure DeFi on Stellar.