How KUSD Generates Rewards: A Unique Approach đĄ
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 âĄïž Settles âĄïž Repays âĄïž Capital is reused
Hereâs how the process unfolds:
1ïžâŁ Liquidity is minted into KUSD.
2ïžâŁ KUSD is staked into sKUSD.
3ïžâŁ Institutions draw liquidity for payment settlements.
4ïžâŁ Transactions clear.
5ïžâŁ Borrowers repay principal + interest.
6ïžâŁ The same capital is instantly reused for the next cycle.
KUSD offers a robust system built on real work, not speculation. âš
đ« No speculation
đ« No leverage
This system provides short-term settlement credit, efficiently used for minutes, hours, or days â not months.
As settlements complete, repayments are made, and rewards accrue. The capital then becomes immediately available for continuous reuse. đ Rewards are driven purely by capital reuse through settlement, independent of volatile market conditions.
For a full breakdown, explore the blog đ
https://blogs.kerneldao.com/blog/how-kusd-generates-rewards
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