kUSD Flow OverviewPage

1

User Deposits USDC

A user provides USDC to the Controller.

In exchange, the protocol mints kUSD, an SPL token on Solana (and ERC‑4626 on EVM/BNB).

2

Minting kUSD as a Yield‑Bearing Asset

Minted kUSD is not just a static stablecoin — it is directly linked to the vault’s NAV.

By design, kUSD is the yield‑bearing synthetic dollar that harnesses systematic alpha on top of perpetual DEXs.

Once minted, kUSD is transferable and composable in DeFi protocols (AMMs, lending markets, margin platforms).

3

Routing Capital into Vaults

The USDC deposited is automatically forwarded into the systematic alpha vaults.

These vaults execute market‑neutral strategies on perpetual DEXs, primarily:

  • Neutral JLP Strategy: capturing LP fee share while hedging delta exposure.

  • Funding Rate Arbitrage: systematically harvesting positive funding spreads while delta‑hedging.

4

Yield Generation

Both strategies generate stable, on‑chain cash flows.

Realized yield is aggregated into the vault’s NAV, tracked transparently on‑chain with oracles.

5

NAV Increase

As yield accrues, the NAV of the vault increases, which means the value of each kUSD increases relative to USDC.

This makes kUSD a productive synthetic dollar: balances remain fixed, but redemption value per token rises over time.

6

Redemption

When a user burns kUSD, they receive USDC back at the current NAV exchange rate.

Arbitrage ensures kUSD trades close to its redemption value in secondary markets.

Detailed flow notes (EVM / Solana)

  • On Binance Smart Chain / EVM chains:

    • A controller handles the same flow with ERC‑20 kUSD and an ERC‑4626 vault.

    • kUSD is minted at deposit / vault pricePerShare, then the controller calls deposit on the ERC‑4626 contract to move the user’s USDC into the vault.

    • Adapters route capital to vetted perp DEXs (GMX, Vertex, Kwenta, Aevo) executing the same market‑neutral sleeves under guardrails.

    • The controller holds the vault shares in treasury so circulating kUSD supply matches vault shares one‑to‑one.

    • A NAV Oracle module posts fresh pricePerShare with freshness and deviation checks.

    • Local safety buffers on each chain satisfy instant redemptions while positions unwind as needed.

    • Every step emits structured events, giving auditors and integrators a deterministic trace from mint → capital deployment → NAV accrual → redemption at current pricePerShare.

  • On Solana:

    • When a user deposits USDC to mint kUSD, the Controller Router program immediately cross‑program invokes transfer of reserves into the Perp Strategy Vault’s program‑derived accounts.

    • The current price per share determines minted kUSD quantity and a deposit receipt is recorded with vault and allocation policy.

    • The vault auto‑routes capital across sleeves (neutralized JLP, funding‑rate carry). Risk bots place hedges on approved perp DEX venues using liquidity‑aware TWAPs, per‑venue exposure caps, delta bands, and Pyth‑based oracle guards.

    • All fills and funding receipts are accrued on‑chain; NAV and price per share are recomputed at the next epoch and published, keeping minting and redemptions strictly tied to real, marked collateral.

Solana / EVM specifics:

  • Solana: Lock kUSD in the Perp Yield Vault to receive locked‑kUSD one‑to‑one at inception, thereafter at the current exchange rate.

  • EVM and BNB Chain: Deposit kUSD into the ERC‑4626 vault to mint shares.

Redemption mechanics & cooldowns

  • Solana: Request withdrawal, observe cooldown, redeem kUSD for USDC at the exchange rate at completion.

  • 24 Hour withdrawal period: Used to close out the yield generating positions across vaults.

  • EVM and BNB Chain: Call redeem or withdraw on the ERC‑4626 vault, subject to a 24‑hour cooldown.

The case for a multi‑strategy yield approach

  • Many traders suffer in a PvP market due to lack of systematic edge.

  • Kvants kUSD & Systematic Alpha Vaults aim to diminish the gap between institutional grade quantitative trading strategies and the everyday investor.

  • This enables retail to gain exposure to the same strategies used by elite hedge funds.

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