# Yield Bearing kUSD

Purpose\
Yield share token that accrues systematic alpha yield through its exchange rate = NAV of the underlying deployed assets into delta-neutral strategies on perpetual DEXs.

## Standards

{% tabs %}
{% tab title="Solana (SPL)" %}

* SPL token issued as tokenized fund units.
* Added liquidity for quick trading in/out of positions without requiring a 24h cooldown.
* Pegged by market forces to the fair NAV of the fund.
  {% endtab %}

{% tab title="EVM & BNB Chain (ERC‑4626)" %}

* ERC‑4626 shares design.
* kUSD as the asset and locked‑kUSD as the share.
  {% endtab %}
  {% endtabs %}

## Description

SOL Yield Engine for kUSD is a yield-bearing stablecoin that accrues Net Asset Value (NAV) from Drift Protocol's vaults on Solana, leveraging market-neutral strategies in Drift's perpetual DEX ecosystem.

* Drift vaults (part of a Solana perp exchange) allow automated, delta-neutral positions (e.g., lending, spot margin, perp trading) to generate yields while maintaining low risk.
* NAV is calculated on-chain based on vault assets priced via Pyth oracles.
* As of Q4 2025, Drift's ecosystem has over $13.68 billion in open interest, enabling scalable alpha for kUSD.

## Multi-chain design

* Native on Solana via SPL tokens.
* On EVM-compatible chains (Ethereum, BNB Chain) via ERC-4626 vaults.
* Cross-chain interoperability uses bridges (e.g., Wormhole or CCIP) to sync NAV accrual from Solana-based Drift vaults to EVM, aiming to ensure consistent yields (target 10–20% APY from funding rates and fees) across chains.

## Further multichain & multi-venue expansion

* The design is composable to add additional systematic alpha engines across other perpetual protocols and chains (Base, Sui, BNB Chain, etc.), enabling diversified yield sources.

## Pegging & mint/redemption mechanics

* kUSD is minted 1:1 against USDC or equivalent stablecoins.
* Over-collateralization (105%+) is maintained for peg stability.
* Peg stability is enforced by arbitrage and oracles.
* Users deposit stables to mint kUSD and can redeem permissionlessly.
* Yields compound daily into share kUSD's NAV, drawn from systematic alpha strategies deployed on perpetual DEXs.

## Related pages

* [PreviousSystem Components](https://kvants.gitbook.io/kvants-whitepaper-1/kvants/system-design-and-tech-stack/system-components)
* [NextkUSD Flow OverviewPage](https://kvants.gitbook.io/kvants-whitepaper-1/kvants/system-design-and-tech-stack/kusd-flow-overviewpage)

Last updated 17 hours ago
