katana core mechanisms: what is AUSD?
katana core mechanisms: what is AUSD?
most centralized stablecoins, like USDC and USDT, are backed by off-chain US treasuries, generating consistent interest income, but exclusively for the stablecoin issuers.
but there is something often overlooked here - users that hold these stablecoins on-chain take on the counterparty risk, but see none of the yield generated off-chain.
katana’s native stablecoin, AUSD, developed by agora, solves this fundamental imbalance. fully collateralized by off-chain US treasury bills, AUSD redirects the generated yield back into katana’s defi ecosystem. if holders use AUSD in katana defi, they will see the upside that centralized stablecoin issuers typically keep for themselves.
this creates a sustainable, off-chain revenue stream for the chain, further enhancing liquidity, economic resilience, and alignment of user incentives with the long-term health of katana.
let’s dig in.
how AUSD works
similar to traditional centralized stablecoins (like circle's USDC & tether's USDT), agora’s AUSD is backed by off-chain US treasuries. however, unlike circle and tether, who retain all earned treasury yield, agora distributes this off-chain yield directly back to the apps and blockchains that drive AUSD adoption.
on katana, this yield flows to active AUSD defi users, enhancing returns in AUSD-denominated pools. this yield is delivered "in-kind," meaning users holding AUSD in defi pools receive additional AUSD tokens, fully collateralized by US treasuries held off-chain.
agora collaborates with industry-leading institutions, including custodial bank state street and asset manager vaneck, ensuring maximum institutional-grade safety, security, and compliance for these reserves.
native minting, no bridging required
AUSD is minted directly on katana, meaning it does not require vaultbridge or bridging from ethereum. users can obtain AUSD through two straightforward methods:
mint AUSD directly from agora
swap for AUSD on sushi swap
this native minting capability gives users the flexibility to engage with stablecoins on katana without interacting with vaultbridge, allowing them to choose their own journey within the ecosystem.
this approach also appeals to institutional investors, who sometimes prefer natively minted stablecoins due to their specific risk tolerance and compliance preferences compared to bridged stablecoin alternatives.
integrating off-chain yield into katana’s defi ecosystem
AUSD’s off-chain yield seamlessly integrates into katana’s defi flywheel, enhancing core ecosystem components:
morpho lending markets: yield boosts incentivize users to deposit AUSD, deepening liquidity and maintaining stable, attractive borrowing rates.
sushi dex liquidity: increased yields attract deeper liquidity for AUSD pairs on sushi, significantly reducing slippage and enabling smoother, larger trades.
perp DEX capital efficiency: using AUSD as base collateral allows users to earn base yield from shared revenue, enhancing capital efficiency.
revenue diversification & bear market resilience
one of AUSD’s key strategic advantages within katana is how it diversifies revenue streams for the chain. while vaultbridge routes yield from ethereum-based strategies, AUSD brings in yield generated by real-world US treasuries. together, these distinct yield sources form a diversified economic base that is used to support the yield for active defi users, insulating katana from the ups and downs we’ve all come to love from the crypto space.
historically, bear markets reduce investor appetite for risk-on assets like crypto and stocks, diminishing attractive defi yield opportunities. however, during these downturns, treasury bill rates often increase as investors flock to safety.
Katana uses this market dynamic to its advantage:
when crypto-native yields decline, AUSD’s off-chain treasury yields often stabilize or rise.
this provides katana AUSD users with stable, or even increasing, yields during market uncertainty, maintaining economic resilience and user confidence.
strategic deployment for long-term health
katana allocates the treasury-derived AUSD yield to pools that enhance the long-term health and scalability of its defi ecosystem. as AUSD adoption increases, the corresponding treasury yield expands as well, creating a sustainable economic cycle that scales in lockstep with adoption.
considering the historically inverse relationship between treasury yields and bear markets, this strategy enables katana to sustainably scale, remain resilient, and thrive. even during prolonged market uncertainty.
as katana’s TVL and network usage grows, AUSD naturally scales in proportion, compounding yields, enhancing liquidity, and reinforcing a positive cycle of ecosystem participation and growth.
why AUSD matters to katana
AUSD represents a strategic evolution in stablecoin design. by directly leveraging real-world treasury yields and returning value to ecosystem participants, AUSD deepens liquidity, diversifies risk, and substantially enhances katana’s resilience.
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.
katana krates: deposit to get gamified lootboxes with a shot at potential outsized KAT rewards or rare NFTs (like a cryptopunk). withdrawal anytime after mainnet, no penalty. any leftover KAT tokens allocated to the katana krates campaign will be distributed to katana krate pre-depositors using a time + amount weighted distribution. it pays to be early.
join the community:
welcome to katana, where stablecoin innovation meets truly sustainable defi.
