Protocol Fee Sharing

It is important for Lenders to understand that the $KSU token generation event is yet to occur. Kasu aims to launch its $KSU in due course. Any reference to $KSU Loyalty Levels, token utility and rewards in this document is therefore only relevant upon launch of the $KSU token.

The Kasu protocol fee model derives 10% of the gross interest earned by Lenders. $KSU Token Lockers who are also Lenders can claim a share in 50% of this fee derived from the Kasu protocol’s lending activity. This equates to 5% of all Lenders’ total gross interest earned. Protocol Fee sharing is paid in USDC. The proportion of this amount to which a $KSU Token Locker (who is also a Lender) is entitled is based on their balance of rKSU relative to all rKSU in the Kasu ecosystem. For example, in a scenario where a total of 1,000 rKSU exists in the entire Kasu ecosystem, a Token Locker (who is also a Lender) who has 150 of these rKSU would be entitled to 15% of all Protocol Fees allocated to $KSU Token Lockers. This proportionality is augmented as more Lenders’ $KSU tokens are locked (or unlocked) to generate more rKSU (or burn more rKSU), entitling them to a proportionate share of protocol fees.

Protocol Fee Sharing is based on the fees generated by Kasu, which totals 10% of all gross interest generated for Lenders. This fee is shared as follows:

• 5% is allocated proportionally to $KSU Token Lockers (who are also Lenders) based on their rKSU token balance.

• 5% is allocated to the Kasu Protocol wallet to fund operations.

For example, assume a Lending Strategy offers 20% Gross APY to Lenders. The Lender will incur fees equivalent to 10% of its interest earned, effectively deriving 18% Net APY after fees (i.e. 10% Fees * 20% Gross APY = 2% Protocol Fee). The associated protocol fees are therefore shared as follows:

• Half of this fee (i.e. 1%) is allocated to KSU Token Lockers (based on the above requirements).

• The other half of this fee (also 1%) is allocated to the Kasu protocol wallet.

It is noted that the Delegate derives revenue by adding a margin to the 20% APY example when it originates loans to its business borrower clients (End Borrowers). This portion does not get captured in the above fee structure.