How KUSD Generates Rewards: A Unique Approach 💡

Unlike most on-chain rewards tied to market fluctuations or incentives, KUSD operates differently. Rewards are generated when payments settle, not from price movements.

The KUSD reward engine is anchored by a clear, sustainable loop:

Institution draws credit line liquidity âžĄïž Settles âžĄïž Repays âžĄïž Capital is reused

Here’s how the process unfolds:

1ïžâƒŁ Liquidity is minted into KUSD.
2ïžâƒŁ KUSD is staked into sKUSD.
3ïžâƒŁ Institutions draw liquidity for payment settlements.
4ïžâƒŁ Transactions clear.
5ïžâƒŁ Borrowers repay principal + interest.
6ïžâƒŁ The same capital is instantly reused for the next cycle.

KUSD offers a robust system built on real work, not speculation. ✹
đŸš« No speculation
đŸš« No leverage
This system provides short-term settlement credit, efficiently used for minutes, hours, or days – not months.

As settlements complete, repayments are made, and rewards accrue. The capital then becomes immediately available for continuous reuse. 🔄 Rewards are driven purely by capital reuse through settlement, independent of volatile market conditions.

For a full breakdown, explore the blog 👇
https://blogs.kerneldao.com/blog/how-kusd-generates-rewards

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