Lending Funds

Lending with Kasu is the easiest way to access high quality on-chain private credit opportunities. Here's a detailed guide to getting started with lending funds on Kasu:

Firstly, ensure that your Web3 Wallet is connected to Base mainnet before connecting it to Kasu.

1. Fund Your Web3 Wallet: Transfer USDC to your Web3. Kasu can also facilitate the conversion of certain cryptocurrencies to USDC via 1inch during the Lending Request process. You’ll see this feature once you connect your wallet to Kasu and proceed to submitting a Lending Request.

2. Explore Lending Strategies: Review the active Lending Strategies on Kasu. Each Lending Strategy will display key information around segmentation by industry sectors in which End Borrowers operate and/or lending asset classes.

3. Review Tranches: If offered by the Delegate, determine which loan Tranche best suits your risk appetite in terms of priority ranking in the event of losses.

4. Review APY Structure: The APY offers may comprise both variable and fixed APYs. A variable APY is subject to change according to 'real world' interest rate market fluctuations (increases/decreases), whereas a fixed APY specifies the term that the APY will be fixed for. It is important to understand that fixed APY offers also mean that the loan term itself is fixed. This means that for a fixed APY loan, no Withdrawal Requests will be accepted during the fixed APY term. However, Withdrawal Requests for variable APY loans can be submitted at any time. Remember that your Loyalty Level directly impacts your withdrawal priority for Variable APY loans. Refer to the 'Fixed APY Loans - Withdrawal Restrictions & Other Conditions' Section in the Important Information Section for full details regarding fixed APY loans.

5. Understand the Risks: You can familiarise yourself with the Delegates’ backgrounds. Currently, Kasu is partnering exclusively with Apxium, whose background and historical track record is fully detailed via the Lending Strategy Overview, Details and Risk Reporting Sections. You can also download a full Strategy Deck in the Overview Section to undertake a deep dive into each Lending Strategy including how Apxium manages risk, along with its Credit Risk Management Framework. The Risk Reporting Section on the platform provides a health pulse check dashboard, detailing the historical performance and key risk metrics of each Lending Strategy. The Repayments Section on the platform also provides detailed Laon Tapes which can be downloaded. A Loan Tape provides historical loan repayment performance identifying any late payments, arrears, defaults and losses. Please also refer to the Risk Warnings' Section for a detailed overview of the broader risks.

6. Consider $KSU Token Utility: Consider whether you’d like to avail of the $KSU token utility and rewards to ensure priority access and withdrawal priority to and from Lending Strategies, along with bonus APY and Protocol Fee Sharing. Visit Token Utility Section for full details.

7. Select a Lending Strategy and Loan Tranche: Based on all the above information, along with your personal circumstances, choose a Lending Strategy that aligns with your financial goals and risk tolerance. Within each Lending Strategy, select the Tranche (Junior, Mezzanine, or Senior) that best fits your risk tolerance in terms of priority ranking in the event of default, which is fully outlined in Loan Tranches Explained Section. Remember that your Loyalty Level directly impacts your priority access to Lending Strategies and Tranches.

8. Submit Your Lending Request: Decide on the amount of USDC you wish to lend, keeping in mind the minimum or maximum lending amounts set by the Delegate, and submit your Lending Request to your chosen Lending Strategy and Tranche.

9. Await Clearing: Your Lending Request will be queued for processing during the next Clearing Period at the end of the current epoch. The duration of an epoch is 7 days. This means that your ‘Lending Portfolio’ in the ‘My Portfolio’ tab will not display any data until the end of the next Clearing Period. Therefore, interest will not start accruing until your Lending Request is accepted at the end of the 7-day epoch.

10. Monitor Transaction Status: The status of your Lending Request (as it transitions from ‘Requested’ to ‘Accepted’ or ‘Rejected’) will be displayed by visiting the My Portfolio > Transactions tab and scroll down to the Detailed Lending Request Transactions Section per the below image. You can also cancel a Lending Request in this section by clicking on the View Details link in the far-right column of the Detailed Lending Request Transactions table. Cancellations must be submitted prior to the commencement of the Clearing Period, which occurs within the final 48 hours of each 7-day epoch.

You can also view this data by visiting the Lending > Overview tab in the Lending Strategy you submitted a Lending Request for and scroll down to the Your Lending Request Transactions Section per the below image.

If the Delegate has not identified an End Borrower for your funds to be deployed to within 30 days, your funds will be automatically returned to you (subject to available liquidity). However, you will still continue to earn interest from the time your Lending Request is accepted.

1. Confirmation: Once the Clearing Period is complete at the end of the 7-day epoch, you'll 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. 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 also be displayed in the My Portfolio > Transactions tab.

2. Stay in Control and Exercise Choice: If you loaned less than 350,000 USDC, look out for emails from [e-mail] informing you of which End Borrower(s) your funds will be deployed to, including every time your funds move from one End Borrower to another. Should a particular End Borrower not appeal to you, then you’ll have the opportunity to ‘Opt Out’ within 48 hours before your funds are deployed. Refer to the Automated Opt-In in the Important Information Section for full details.

3. Monitor Your Lending: Track your position and performance through the ‘My Portfolio’ tab, ‘Lending Portfolio’ Section.

4. Fixed APY Loan Instructions: If you entered into a fixed APY loan and would like your funds to be fully repaid at the fixed term expiry of the loan, then be sure to notify Kasu via the ‘My Portfolio’ tab, ‘Lending Portfolio’ Section within 4 epochs of the loan expiry. Otherwise, your fixed APY loan will automatically be converted to a variable APY loan (at the prevailing variable APY), where you’ll be subject to the normal Withdrawal Request (and associated queueing) process. Refer to the Fixed APY Loans - Withdrawal Restrictions & Other Conditions Section for further details related to fixed APY loans.

5. Track Lending Strategy Performance: Leverage the transparency offered by Kasu by continually monitoring the performance of each Lending Strategy via the Risk Reporting Section. This provides a health pulse check of the performance and risk status of Lending Strategies.

Lending Request Process

Remember, higher Loyalty Levels provide priority access to popular Lending Strategies, whilst enhancing your lending experience with additional utility and rewards, as outlined in The Role of KSU Tokens section.

It's important to note that while you can request a withdrawal at any time from a variable APY loan, the actual fulfilment of withdrawals is subject to available liquidity, which is determined during the Clearing Period at the end of each epoch. You can track the status of your Withdrawals in the My Portfolio > Transactions tab. If you're Withdrawal Request has not been fulfilled within 5 epochs, you will automatically outrank all published Loyalty Levels in terms of your position in the queue.

Kasu makes private credit lending seamless, but it's important to understand the details of each Lending Strategy and the associated risks before participating.

Please ensure you read the Important Information Section which provides essential details and specific risk associated with lending on Kasu, along with the Risks Warnings Section for more general risks.