Understanding Loyalty Levels

There is no requirement to purchase and lock $KASU to lend USDC on Kasu. However, your lending experience can be enhanced by achieving Loyalty Levels, which determines the extent of utiliy and rewards you receive as a Lender. This is calculated using the following formula, referred to as your rKASU-to-Lending Ratio:

Loyalty Levels, and associated utility and rewards, are as follows:

Loyalty Level 1

If your rKASU-to-Lending Ratio exceeds 0%, but is less than 1%, then you are entitled to the following reward:

• Protocol Fee Sharing, paid in USDC (your share of fees is based on the amount of your rKASU relative to all rKASU in the Kasu ecosystem).

Loyalty Level 2

If your rKASU-to-Lending Ratio equals 1%, but is less than 5%, then you are entitled to the following utility and rewards:

• Protocol Fee Sharing, paid in USDC (your share of fees is based on the amount of your rKASU relative to all rKASU in the Kasu ecosystem).

• APY bonus, paid in $KASU tokens.

• Second order priority access to Lending Strategies.

• Second order priority for Withdrawals from Lending Strategy.

Loyalty Level 3

If your rKASU-to-Lending Ratio equals 5% or more, then you are entitled to the following utility and rewards:

• Protocol Fee Sharing, paid in USDC (your share of fees is based on the amount of your rKASU relative to all rKASU in the Kasu ecosystem).

• APY bonus, paid in $KASU tokens (higher APY bonus than Loyalty Level 2).

• First order priority access to Lending Strategies (higher priority than Loyalty Level 2).

• First order priority for Withdrawals from Lending Strategy (higher priority than Loyalty Level 2).

The amount of Protocol Fees you can earn is not capped. For example, the higher your rKASU-to-Lending ratio beyond the minimum 5% for Loyalty Level 3, the more share of Protocol fees you will earn.

The amount of Bonus APY for each Loyalty Level will be published on the Kasu platform, and is subject to change depending on factors such as liquidity shortages or excesses.

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 3), regardless of your existing Loyalty Level. This is also the case for Lenders that have not achieved a Loyalty Level.

Important notes

• After 5 epochs, any Withdrawal Requests that remain queued (yet to be fulfilled) receive the highest priority regardless of existing Loyalty Level.

• You can unlock any portion of your $KASU when the lock period ends.

• Unlocking $KASU burns the corresponding/proportionate amount of rKASU, which may affect your Loyalty Level.

• $KASU price changes can affect your Loyalty Level, given that the synthetic value of rKASU is pegged to the $KASU price.

The rKASU-to-Lending ratio system is designed to be inclusive, where a Lender with a small USDC lending balance can achieve higher priority than a Lender with a very large USDC lending balance. This loyalty system therefore rewards engaged participants while remaining accessible to all Lenders, regardless of their lending amount.