Frequently Asked Questions
What is Kasu, and how does it work?
Kasu is a platform that connects Lenders with real-world private credit lending opportunities, all curated by industry leading loan portfolio and risk managers (Delegates) that are exclusive to Kasu. Delegates offer a range of Lending Strategies for Lenders to lend USDC and earn interest/yield.
How do I start lending on Kasu?
To start lending, complete the KYC process, fund your Web3 wallet with USDC and connect your wallet to Kasu. Choose a Lending Strategy and Tranche that is suitable for you and submit a Lending Request. Before you get started, please ensure your Web3 Wallet is connect to Base mainnet.
Can I participate in multiple Lending Strategies simultaneously?
Yes, you can lend in multiple Lending Strategies to diversify your lending portfolio.
How is my interest calculated and distributed?
Interest is accrued and auto-compounded every weekly epoch and updated into your balance at the beginning of every new epoch. This means your interest earnings are not distributed or claimed manually — instead, they’re automatically added to your principal, allowing your balance to grow over time through compounding.
To convert the Gross Annual Percentage Yield (APY) into a weekly interest rate (before fees), Kasu uses the following formula to calculate weekly gross interest:
(((1 + APY)^(1 / 52.17857)) - 1)
🔍 Example — 16% Gross APY (before fees)
Where:
APYis expressed as a decimal (e.g. 16% APY = 0.16)52.17857represents the number of weeks in a year, based on 365.25 days ÷ 7Weekly Gross Interest:
((1 + 0.16)^(1 / 52.17857)) - 1 ≈ 0.00289(≈ 0.289%)
Kasu then applies a 10% platform fee to your weekly gross interest (half of which is shared with Lenders who are also KASU token lockers, as they earn Protocol Fees) . The remaining 90% is accrued and auto-compounded into your loan.
The weekly net interest formula is therefore as follows:
(((1 + APY)^(1 / 52.17857)) - 1) × 90%
Weekly Net Interest:
0.00289 × 90% ≈ 0.00260(≈ 0.260%)
How long after submitting my Lending Request do I start earning interest?
It is important to understand that all Lending Requests must be submitted prior to the Clearing Period (final 48 hours of each weekly epoch) to be considered for the next weekly epoch. This will be determined by the Credit Originator's need for funding, which is determined during each weekly Clearing Period:
If your Lending Request is submitted before the Clearing Period cut-off (Tuesday 6 AM UTC) – and it is accepted – you’ll start earning from the beginning of the next epoch.
If your Lending Request is submitted after the cut-off, it will be carried over to the following Clearing Period – and if accepted – interest will start accruing from that following weekly epoch.
Interest does not start accruing until the beginning of the next weekly epoch. If your Lending Request is not accepted, it will be rejected (funds will be returned).
What is APY and how does it differ to APR?
Annual Percentage Yield (APY) represents your total interest earnings over a year assuming you leave both your principal and earned interest in the Lending Strategy (for auto-compounding) without withdrawing any funds. It reflects compound interest, unlike Annual Percentage Rate (APR), which only shows simple interest, and therefore doesn't take compounding into account. Therefore, if you withdraw interest early, your effective return may be lower than the stated APY. At Kasu, given that interest accrues onto a Lender's balance each epoch, we quote APY to transparently show the effect of compounding when Lenders let their funds roll over across epochs.
Common Mistake: APR vs APY
Some users mistakenly calculate weekly interest using:
LoanBalance × (APY ÷ 52); or,
LoanBalance × (APY ÷ 365 × 7)
This only works if you're dealing with APR (simple interest), not APY, which assumes compound interest. Since Kasu uses APY, a compounding formula like the one above is required to calculate your true weekly earnings.
I just submitted a Lending Request and can’t see it in my Lending Portfolio.
The outcome of every Lending Request is determined at the end of each weekly epoch. Therefore, if your Lending Request is accepted, it will appear from the beginning of the next epoch.
To view the status of your Lending Request (as it transitions from ‘Requested’ to ‘Accepted’ or ‘Rejected’), visit My Portfolio > Transactions tab and scrolling down to the Detailed Lending Request Transactions Section. You can also view this data by scrolling down to the ‘Your Lending’ Section in the Overview page of the particular Lending Strategy you submitted a Lending Request for. Once the Clearing Period is complete at the end of the 7-day epoch, you'll then notice an update to your transaction status in the ‘Transactions’ page in the ‘My Portfolio’ tab, along with the ‘Your Lending’ Section in the Overview page of the particular Lending Strategy you submitted a Lending Request for.
To view additional transactions details after your Lending Request has been accepted, visit My Portfolio > Transactions, scroll down to the Detailed Lending Request Transactions Section, and click on the View Details link in the far-right column, which will display a modal with more details.
Where can I view the status of my Withdrawal Request?
To view the status of your Withdrawal Request, visit My Portfolio > Transactions tab and scroll down to access the table which displays all your Withdrawal Requests. You can also view this data by scrolling down to the ‘Your Lending’ Section in the Overview page of the particular Lending Strategy you submitted a Withdrawal Request for. Click on the View Details link in the far-right column of this table to view a detailed breakdown.
How do I cancel my Lending or Withdrawal Request?
Navigate to My Portfolio > Transactions tab. To cancel a Lending Request, scroll down to 'Detailed Lending Request Transactions.' In the table, click on the View Details link in the far-right column where you'll be given the option to cancel. To cancel a Withdrawal Request, follow the same process, but scroll down to 'Detailed Withdrawal Request Transactions' instead. Cancellations must be submitted prior to the commencement of the Clearing Period, which occurs within the final 48 hours of each 7-day epoch. No cancellations requests can be submitted after the Clearing Period has commenced.
What happens with the Opt In/Out process after submitting my Lending Request?
If your Lending Request is accepted, the Delegate has 30 days to loan your funds to an End Borrower. Once an End Borrower is identified, you will receive an email notifying you of the identity of End Borrower, providing you with control over your funds to Opt In or Opt Out within 48 hours. To Opt Out, connect your wallet and navigate to My Portfolio > Transactions where you will see all your loans awaiting your Opt In/Out instructions. This process occurs every time your funds are redeployed from one End Borrower to another, keeping you in control of your funds. It is noted that if you don't make an Opt In/Out decision within 48 hours of receiving your email, an automatic Opt In will take place. Be sure to adjust your email spam settings to accept emails from: [email protected]
Where can I find more information on the key risks and specific nuances on how lending works?
We’ve created two self-contained sections that provide a comprehensive summary of this detail. Refer to the Important Information and Risks Sections.
What if I don’t Opt Out within 48 hours?
Your funds will automatically be loaned to the End Borrower disclosed to you in your email. Be sure to adjust your email spam settings to accept emails from: [email protected]
Please refer to the Automated Opt-In Section of the Important Information for full details.
What are the different Tranches, and how do they affect my lending?
Tranching specifically relates to Kasu Lenders' ranking priority in the capital structure for the recovery of funds in the event of losses. Each Tranche therefore offers a higher or lower APY that compensates Lenders for the higher or lower degree of risk associated with their ranking in the capital structure (i.e. lower APY for higher a higher ranking, versus higher APY for a lower ranking position).
The following example assumes a Delegate offers all three Tranches for a Lending Strategy:
Senior Tranche: The Senior Tranche offers the lowest APY and carries the lowest risk, as it has the highest-ranking priority to claim any recovered funds (if available) across all Tranches in the event of losses. Similarly, it is the last to absorb losses.
Mezzanine Tranche: The Mezzanine Tranche offers a higher APY than the Senior Tranche, but lower than the Junior Tranche. This is because it has the second highest-ranking priority to claim any recovered funds (if available) after the Senior Tranche. Similarly, it is the second to absorb losses (after the Junior Tranche).
Junior Tranche: The Junior Tranche offers the highest APY, as it has the lowest-ranking priority to claim any recovered funds (if available) across all Tranches in the event of losses. Similarly, it is the first to absorb losses.
Refer to the Risk Disclosure: Senior, Mezzanine and Junior Tranches Section for full details.
Is my interest earnings or Withdrawal Requests affected by the Tranche I choose?
No, not unless there are losses. Unlike the cash flow waterfall priority ranking system associated with loan Tranches in TradFi (which also applies to general repayments of principal and interest), Loan Tranches on Kasu only apply priority ranking in the case of losses and recoveries. I.e. all loan Tranches on Kasu have equal ranking to principal repayments and interest earnings (assuming no losses or defaults). Similarly, all loan Tranches on Kasu also have equal ranking to Withdrawal Requests (subject to Loyalty Levels and queuing).
I submitted a Lending Request for a higher APY Tranche (i.e. Junior or Mezzanine), but my Portfolio shows I now have a loan in a lower APY Tranche (i.e. Senior).
If the particular loan Tranche you selected was oversubscribed, your funds may be reallocated to a lower risk and lower APY Tranche that has available capacity, or returned to your wallet if there is no available capacity. This will be shown in the ‘Transactions’ page in the ‘My Portfolio’ tab. This is fully detailed in the Important Information you acknowledge when submitting your Lending Request. If you don't want your funds to be allocated to the next available tranche, you have the opportunity to Opt Out within the 48 hour window after being informed of the End Borrower to which your funds will be deployed.
How does a fixed APY loan differ from a variable APY loan?
The APY on a variable APY loan may be subject to change every four epochs. However, Lenders have the flexibility to submit Withdrawal Requests any time. In comparison, the APY on a fixed APY loan is fixed for the duration of the loan. This means the loan term is also fixed for the duration of the fixed APY term, meaning no Withdrawal Requests can be submitted during this period. This is fully detailed in the Fixed APY Loans - Withdrawal Restrictions & Other Conditions Section.
What happens at the end/expiry of a fixed APY loan?
KYou can notify Kasu with no less than four weeks notice that you’d like your loan fully repaid at the end of the fixed loan term. This notification can be submitted via the My Portfolio > Lending Portfolio page. If you don’t notify Kasu with at least four weeks notice, your fixed APY loan will automatically convert to a variable APY loan upon expiry, where you’ll then be subject to the normal Withdrawal Process.
Why have my funds been returned to me?
This could be due to one of the following reasons: 1) your Lending Request was rejected as the Lending Strategy and Tranche you selected does not have enough capacity to accept additional funds at this time; 2) the Delegate initially accepted your Lending Request, but was unable to find an End Borrower to loan your funds to within 30 days to lack of borrowing demand; 3) the Delegate may have applied a Forced Withdrawal due to a sudden lack of demand from End Borrowers. You can view these transactions by visiting My Portfolio > Transactions tab and scrolling down to the Detailed Lending Request Transactions Section. For transaction that occur after a Lending Request is accepted, click on the View Transaction Details link in the far right column, which will display a modal with more details.
How often can I withdraw my funds?
When it comes to variable APY loans, You can submit a Withdrawal Request request withdrawals at any time. The outcome of Withdrawal Requests is determined, but they're processed during the Clearing Periods at the end of each epoch, typically every 7 days. At this time, your Withdrawal Request may only be fulfilled in part, or not at all, and therefore carried over to the next epoch. Fulfilment of Withdrawal Requests is based on the liquidity requirements of Lending Strategies at any given time. When it comes to fixed APY loans, no Withdrawal Requests can be submitted, as the loan term is also fixed for the duration of the fixed APY term.
How long can my Withdrawal Request remain outstanding before I receive my funds?
At the end of each Clearing Period of each 7-day Epoch, your Withdrawal Request may or Accepted in part, or in whole, or the entire amount may remain queued (outstanding, with nil amount Accepted) until the Clearing Period of the next 7-day epoch, Therefore, your Withdrawal Request may be progressively accepted over multiple epochs until the entire amount is fulfilled. The fulfilment of your Withdrawal Request depends on the available liquidity in each Lending Strategy. If your Withdrawal Request has not been fulfilled (Accepted) after 5 Epochs, it will automatically outrank all published Loyalty Levels, elevated to the highest priority (exceeding Loyalty Level 2), regardless of your existing Loyalty Level (even if you do not have a Loyalty Level).
How can I increase the chances of my Withdrawal Requests being accepted quicker?
You can achieve higher withdrawal priority by establishing/increasing Loyalty Levels.
What is $KASU, and why should I consider locking it?
KSU is Kasu's native token. Locking a minimum amount of KSU for a minimum duration establishes/increases your Loyalty Level, which can provide benefits like priority in Lending Requests, priority in Withdrawal Requestion and bonus interest. It also entitles Lenders to Protocol Fee Sharing without having to establish a Loyalty Level first.
How do Loyalty Levels work, and how can I increase mine?
Loyalty Levels are determined by the amount and duration of locked KSU, which generates rKSU. The ratio of your rKSU relative to your locked KSU to your USDC loans determines your Loyalty Level and the associated extent of KSU token utility and benefits. You can increase your level by locking more KSU or managing your loan balance.
What happens if I want to unlock my $KASU tokens before the lock period ends?
KSU tokens cannot be unlocked before the chosen lock period ends. Plan your KSU locking strategy carefully based on your liquidity needs.
What happens if a borrower defaults on their loan?
Kasu has a structured approach to handling losses and defaults through a priority ranking system, where in the case of any recoveries, Senior Tranche Lenders are repaid first, followed by Mezzanine Tranche Lenders and finally Junior Tranche Lenders.
What are epochs, and why are they important?
Epochs are fixed time periods (7 days) that structure Kasu's operations, including interest calculations and processing of lending transactions. It is important to note that this means that all your Lending and Withdrawal Requests are determined (fulfilled or otherwise) during the final 48 hours of each epoch, with your updated loan balance(s) and interest accrued reflected at the beginning of each new epoch.
What is First Loss Capital, and how does it protect me as a Lender?
In some instances, Kasu may require Delegates to contribute their own funds as First Loss Capital. This acts as a buffer to absorb initial losses in a Lending Strategy before affecting Lenders.
What fees does Kasu charge and how does Kasu use these fees?
Fees comprise 10% of interest earned by Lenders. Half of this fee is to fund Protocol Fee Sharing for Lenders who are also KSU token lockers. The remaining half is for the Kasu Protocol to fund operations. This is fully outlined in the documentation and the above interest calcualtion section.
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