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Smart contracts work, but not for everything. While the technological primitive has alleviated many efficiency issues in the blockchain industry, its security gaps also account for more than $3.1 billion in stolen funds from hacks in 2022.
Likewise, smart contracts offer few solutions to the stagnation in Web3 adoption, as they do not support easy cross-network transfers or transactions—including on the Bitcoin blockchain. Fundamental tasks, such as transferring money between friends, converting crypto to fiat, or purchasing digital assets, involve too many obstacles for the average person to meaningfully use blockchain on a regular basis.
Kima goes back to basics by leveraging blockchain wallets and direct peer-to-peer transfers to simplify crypto-fiat accessibility and elevate cross-network functionality. As an asset-agnostic, peer-to-peer money transfer and payment protocol, its SDK creates a unified financial settlement layer that provides an infrastructure for other projects or companies to implement.
“Crypto and fiat cannot move forward as partners without addressing the number of complicated intermediaries needed to bridge them, due to their complex regulatory and technical landscapes,” says Eitan Katz, CEO of Kima. “Simply put, our protocol aims to use the blockchain for what it does best: removing intermediaries. This is what will break the silos that impede progress and create unprecedented levels of efficiency and security.”
By building its protocol around direct money transfers via blockchain addresses and bank accounts, rather than smart contracts, Kima eliminates technical dependencies and vulnerabilities. This also allows the protocol to welcome blockchains and traditional financial institutions whose infrastructures are incompatible with smart contracts.
Kima makes common financial services such as money transfers, transactions, and escrow services between ecosystems—blockchains and bank accounts—as seamless as possible by using funds from anywhere. It does this by using key building blocks to bolster settlement security, which includes externally owned accounts, TSS and trusted execution environments, efficient liquidity management, and opt-in compliance to support compliant transactions at the protocol level.
The launch coincides with Kima joining FinSec Innovation Lab, a joint venture of Mastercard and Enel X to support projects advancing research and development in financial technology and cybersecurity. Kima now has the capabilities to conduct complex research in evolving financial systems. The agreement garners critical support from Mastercard and Enel X to expand Kima’s beta program with financial institutions, launch pilot projects, and develop progressive technology.
“We are thrilled to welcome Eitan Katz and Kima to our lab and we look forward to our joint journey,” says Sidney Gottesman, CEO of FinSec Innovation Lab. “Digital Assets is one of our focus areas and made Kima a natural fit for the lab.“
Kima SDK launch leverages $1.7 million in pre-seed funding to benefit dApp developers, institutional Web3 builders, Web 2.0 apps, and fintech companies—empowering traditional institutions to begin bridging crypto and fiat. Unlike other crypto bridges, such as centralized swaps, and onramp-offramp services, Kima’s Smart Transaction primitive is not bound to exchanges or specific networks, ensuring minimized trust assumptions while maximizing efficiency. Likewise, its independence from smart contracts eliminates security and counterparty risks.
As the foundation of its offering, Kima’s settlement layer is built to handle wide-ranging applications including cross-border transfers, eCommerce, borrowing and lending, gaming, NFT marketplaces, wallets, and decentralized exchanges.
In relation to Kima’s scope and ambitions, Katz additionally stated “Launching our SDK indicates a step toward making cross-ecosystem financial interaction as seamless, secure, and transparent as possible, to make it as ubiquitous as PayPal or Apple Pay.”
