katana core mechanisms: what are sequencer fees?
sequencer fees explained & how katana uses them
on ethereum’s L2 networks, transactions aren't directly on ethereum mainnet.
instead, transactions are batched and processed by a node called a sequencer. the fees paid for this convenience are called sequencer fees. this approach reduces transaction costs significantly compared to mainnet fees, making it cheaper and faster for L2 users.
a portion of these fees cover the cost of processing transactions and posting necessary data—like proofs, states, and pointing to blobs—back to ethereum.
but where do the rest of these fees go? that’s where katana is different.
how much are L2s making from sequencer fees?
sequencer fees are big business for L2 chains. according to growthepie.com, in the past 12-months alone:
base generated around $73 million in net fees ($79M gross)
arbitrum pulled in roughly $19 million ($23M gross)
optimism earned about $7 million ($8M gross)
these are net fees, meaning total sequencer fees collected minus what the chains pay to ethereum for data storage.
where do sequencer fees normally go?
usually, sequencer fees help keep the L2 running by covering gas costs for posting data to ethereum. any leftover, or "net fees," typically goes to the project’s treasury or chain operators.
some chains give back to their communities. optimism, for example, uses a portion to fund 'public goods'. but most chains keep the vast majority of this profit, benefiting their treasuries more than their users.
katana has a better idea
katana takes a different, defi-first approach. katana puts 100% of net sequencer fees directly into the katana defi ecosystem. all of it goes back into the system. these net sequencer fees are used in two ways:
higher yields: fees boost returns on core katana apps like morpho and sushi, giving active users better APRs.
chain-owned liquidity (CoL): fees build permanent liquidity reserves, stabilizing markets, cutting volatility, and ensuring deep liquidity in all market conditions.
why should users care?
routing net sequencer fees back to katana defi pools creates a sustainable economic loop:
more transactions → more sequencer fees
more sequencer fees → deeper CoL & higher yields
higher yields & deeper liquidity → attracts more user activity
more user activity → even more transactions
this positive feedback loop keeps katana’s defi ecosystem thriving and directly benefits active defi users, instead of lining some treasury’s pockets.
bottom line
katana’s approach to sequencer fees is all about transparency and long-term defi ecosystem health. by funneling sequencer profits directly back into the defi ecosystem, katana creates deeper liquidity, higher yields, and a stronger, user-focused network.
how do i get involved?
public mainnet is coming late june/early july, but there are already multiple ways to get involved early:
turtle club: pre-deposit in curated defi pools with high APR. can withdraw anytime after mainnet, but you take a haircut on some of the APR earned if withdrawn before 3 months after mainnet.
join the community:
welcome to katana, where sequencer fees fuel a better defi experience.
