Greythorn Core Research: Kujira & Premia

Greythorn Asset Management
6 min readSep 28, 2022


An exploration into the trending Cosmos L1 & the leading American options protocol on Arbitrum.

  1. Kujira

Kujira & Cosmos have garnered plenty of attention over recent weeks, primarily due to the launch of Cosmos 2.0 & Kujira’s value proposition to create a Layer 1 that provides cost efficiency & constructive integration within the broader Cosmos ecosystem.

The platform consists of four blocks: Orca, Fin, Blue & Finder. The first three are DeFi platforms, while Finder is a blockchain scanner.

Token: $KUJI & $USK


  • Aave: similar to Kujira’s lending function
  • Compound: similar to Kujira’s dual-token model
  • Maker DAO: similar to Kujira’s dual-token model

Bullish Fundamentals:

  • Cross-Chain Security: Kujira will be able to rent security from the Cosmos Hub to improve the safety of its L1 platform. Kujira & Cosmos validators will benefit as Kujira becomes more decentralised & ATOM validators gain more rewards.
  • Real Yield: $KUJI is non-inflationary.
  • Ecosystem encourages participation: Orca provides all users with the right to participate in liquidation, while $KUJI stakers are encouraged to vote and actively choose validators aligned with stakers’ interests.
  • Development in the form of:
  • Black Whale, a platform which offers market marking solutions on Kujira, improves liquidity on FIN & passes on a portion of its fees, 50%, to $KUJI stakers.
  • Perpetual Swaps are set to be released soon on FIN.
  • The launch of Kado on Kujira allows fiat holders to easily convert their assets to Kujira & begin trading on FIN.

Bearish Fundamentals:

  • Strength of $USK Peg during periods of adverse market conditions remains unknown: The collateral to mint $USK is currently $ATOM which has a volatility of 105%. Even though $KUJI will be gradually transferred as the only asset backing $USK, its token model will then become similar to $UST — $LUNA, which displayed weak resilience during periods of market stress.
  • Directly staking $ATOM provides a return of ~18%, which is relatively competitive to the returns from providing $USK on Orca (3–8%).
  • Relatively Centralised Tokenomics: Team & Advisors account for more than 28% of token holdings.

2. Premia

While Arbitrum already has options protocols in the form of Dopex & Jones DAO, Premia is the only DEX to offer American options as its core line of products. It offers peer-to-pool trading with options that are fully collateralised.

Its pricing mechanism is ultimately determined by the supply & demand of the pool’s capital leading to various pricing discrepancies between the pool & the oracle. This is advertised as the rate below/above market value & allows for a wide range of opportunities between Premia and other option providers both on CeFi & DeFi.

Token: $PREMIA


Bullish Fundamentals:

  • 80% of fees are converted to $PREMIA & distributed to $xPREMIA holders (stakers).
  • Upcoming features set to be launched with version 3 during Q4:

1. More option strategies,

2. Greater flexibility for sellers by allowing the selection of strikes & expiries,

3. Moving to $vePREMIA (longer lockups, higher voting power, more rewards & direct emissions). The more $PREMIA a user holds will also allow them to receive discounts on their option trades.

  • The platform boasts a smooth UI/UX, similar to Robinhood.

Bearish Fundamentals:

  • High Purchase Fee: Relatively high 3% purchase fee for option buyers.
  • Extra costs in the form of a 2.5% annual settlement fee for option sellers.
  • Inflexibility: Currently, option sellers cannot select strikes & expiries.
  • ¾ audit rating by Hacken: The staking contract contains token assets that may be used in a FlashLoan attack.
  • FIFO Seller Queue: Option sellers have to wait in a queue to be allocated to buyers depending on when they fill an order.

Closing Remarks

Kujira & Premia are two examples of continued innovation & development during this bear market. Integrating projects within a broader blockchain ecosystem is necessary for the long-term sustainability & activity of decentralised finance. Kujira is not the first, nor will it be, the last to provide this solution to the market. Premia has provided a niche service to traders who prefer to exercise their option products before expiration. This is an interesting case of how elementary ideas from traditional finance are still early in their execution across DeFi.


CoinGecko. 2022. Cryptocurrency Prices, Charts, and Crypto Market Cap | CoinGecko. [online] Available at: <> [Accessed 26 September 2022].

CoinMarketCap. 2022. Cryptocurrency Prices, Charts And Market Capitalizations | CoinMarketCap. [online] Available at: <> [Accessed 26 September 2022]. 2022. Grown-Up DeFi — Kujira Docs. [online] Available at: <> [Accessed 26 September 2022]. 2022. Overview — Premia. [online] Available at: <> [Accessed 26 September 2022].

Web 3 Crypto Hub. 2022. The Babylonians. [online] Available at: <> [Accessed 26 September 2022].

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