Introducing kvantsUSD (kUSD)

The first stablecoin backed by dollar-neutral quantitative trading portfolios on top of decentralised perpetual exchanges.

Abstract

The journey of digital currency began with Bitcoin, envisioned as a decentralized alternative to traditional fiat systems. However, Bitcoin's inherent volatility highlighted the need for a more stable digital asset. This led to the emergence of stablecoins, initially backed by fiat currencies, which, while offering stability, diverged from Satoshi's original vision of a system independent of traditional finance. Early attempts at algorithmic stablecoins, such as Luna's UST, aimed for decentralization but ultimately faced stability challenges that led to their collapse. More recently, projects like Ethena's USDe have introduced innovative approaches, utilizing basis trading strategies to maintain their peg. Building upon these advancements, kUSD represents a further evolution in stablecoin design. It moves beyond singular strategies like basis trading, employing a diversified suite of dollar-neutral quantitative trading strategies on perpetual decentralized exchanges. This multi-strategy approach aims to provide a more robust and resilient backing for the stablecoin, offering enhanced stability and yield to its holders.

Introducing kUSD

kUSD is a USD‑pegged stablecoin whose yield is derived from fully on‑chain, market‑neutral strategies executed on perpetual decentralized exchanges (perp DEXs). Users deposit USDC and mint kUSD 1:1; minting can then be “locked” into ekUSD share tokens to accrue strategy yield that compounds into the ekUSD Net Asset Value (NAV). Collateral is deployed through the Kvants Vaults suite into (1) delta‑neutral JLP hedging and (2) funding‑rate arbitrage across Solana perp venues. (Later to be expanded across numerous other chains and venues, such as Aster, Hyperliquid, ApeX and others). All with on‑chain transparency via Pyth price feeds and Chainlinks PoR, production‑hardened vault infrastructure primitives.

At the system level, kUSD targets ≥105% aggregate collateralization through a dedicated Safety Buffer that absorbs strategy drawdowns and ensures immediate redemptions at $1. ekUSD holders, not kUSD holders, bear strategy P&L (positive or negative), cleanly separating stability from yield.

The design of kUSD is motivated by a) the 2025 explosion in derivatives trading activity and open interest (record highs above ~$13–14.5B OI reported in September 2025 on Solana), which expands neutral carry opportunities, and b) the maturation of perp DEX liquidity products like JLP where fee‑sharing mechanics are programmatically transparent. And where new alpha capture opportunities are created for systematic strategies.