katana core mechanisms: what is vaultbridge?
katana core mechanisms: what is vaultbridge?
katana is purpose-built for defi, designed to bring deep liquidity and high sustainable yield to its users.
other defi chains are plagued by issues like unproductive assets, fragmented liquidity, and unsustainable yields.
not katana. why? incentive alignment. users who are productive with their capital get rewarded. the system is powered by several interconnected mechanisms that make up the katana flywheel
one of the most innovative and fundamental components of this system is vaultbridge. instead of idle assets, vaultbridge channels real L1 yield from ethereum to katana defi pools. turning passive capital into productive, reward-generating capital.
let’s goooo 👇
what is vaultbridge?
Vaultbridge makes bridged assets productive.
unlike standard bridges where deposited assets sit idle in a smart contract on L1, vaultbridge puts capital to work immediately by deploying certain bridged assets into low-risk yield strategies on ethereum.
think of traditional bridges as holding a full 1:1 idle reserve on the source chain. vaultbridge, however, operates on a model that puts those assets to work from the start. when certain assets are bridged (USDC, USDT, WETH, WBTC), they are deployed into low-risk yield-generating strategies in morpho vaults on ethereum. this generates revenue from the underlying assets, transforming them into "productive TVL."
importantly, vaultbridge is a separate protocol built by polygon labs’s agglayer team, distinct from katana itself. katana simply integrates with vaultbridge and utilizes it, but vaultbridge can be used by any chain to generate reveune.
how does vaultbridge work with katana?
vaultbridge turns bridged assets into vaultbridge tokens (vbTokens) on katana. and only users who put those tokens to work in defi earn the yield generated upstream. here’s how it works:
deposit and vbToken issuance: users deposit supported assets (ETH/WETH, USDC, USDT, WBTC) into vaultbridge on ethereum. in return, they receive corresponding vbTokens like vbUSDC, vbWBTC, etc. on katana.
yield generation on L1: those deposited assets are deployed into low-risk, high-liquidity yield strategies via morpho vaults on ethereum. these strategies are curated by reputable risk-curators, gauntlet and steakhouse financial.
bridging vbTokens to katana: users receive vbTokens on katana through agglayer. on katana, these tokens function like standard ERC-20 defi assets.
yield routing to katana: yield generated on L1 is streamed back to katana. this yield is then routed to boost rewards in core defi apps on katana, like morpho and sushi.
active use required: vbTokens in your wallet don’t earn vaultbridge yield by default. to benefit from the boosted yield, users must deploy their vbTokens into lending, DEX LPs, or other defi pools on katana. this ensures ‘productive TVL’ both on ethereum and on katana. only active participation is rewarded.
why does it matter?
if you’re depositing vbTokens into lending markets, DEX LPs, or other core apps, you’re earning more than just base protocol rewards.
you’re tapping into a yield stack that includes vaultbridge earnings, sequencer fees, CoL yield, and more.
deeper liquidity means tighter spreads and better rates. and since passive wallets don’t earn, only active defi participants benefit. that’s productive TVL in action, anon.
key integrations
vaultbridge connects deeply with several components in the katana ecosystem.
morpho runs the lending layer both upstream on ethereum and natively on katana.
agglayer powers the bridging infrastructure for vbTokens and vaultbridge yield.
vaultbridge yield flows into core apps including sushi and morpho, boosting rewards and directing user liquidity.
chain-owned liquidity (CoL) can act as a backstop for bridge withdrawals and complements vaultbridge incentives.
finally, while AUSD, uAssets, and other core assets aren't directly bridged via vaultbridge, they still benefit from its rewards, helping to grow and sustain katana’s broader defi landscape.
vaultbridge is a foundational piece of katana’s flywheel.
by converting idle assets into productive capital, it helps build a defi environment with real yield, deep liquidity, and aligned incentives. it’s the revenue engine for a more sustainable chain economy.
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: predeposit in curated defi pools with high APR. funds available to withdrawal three months after mainnet launch. can withdraw anytime after mainnet, but you take a haircut on some of the APR earned.
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 predepositors using a time + amount weighted distribution. it pays to be early.
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