Kasu views the credit markets problem as multidimensional, resulting in deep systemic issues. Existing RWA lending platforms have paved the way in levelling the playing field for everyday DeFi Lenders to access diverse yield opportunities. But, as time progressed, this has now become the RWA industry norm.

At Kasu, we see the problem as much deeper than merely democratising access to credit markets. Whether it's TradFi, DeFi or RWA lending, the problem remains that lending is a commoditised product. No business lending solutions exist to fix the core cash flow problem that initially creates the borrowing need.

For example, a business whose cash is tied up in debtors typically seeks an invoice finance and receivables finance loan to solve their cash flow problem. However, these lending solutions fails to solve the root cause of the problem, which is late debtor collections, thereby presenting increased credit risk to Lenders.

1. Broken capital chain: Credit Funds do not support Credit Originators until they reach a minimum level of loan under management. This makes it extremely difficult for Credit Originators to achieve scale and breakout growth.

2. Lending is a commoditised product with no deep value-add: No business lending solutions exist to fix the core cash flow problem that initially creates the borrowing need.

PROBLEM 1: Broken Capital Chain

Kasu’s hybrid capital infrastructure solution addresses several critical pain points across both TradFi and DeFi landscapes, creating a more efficient, transparent, and accessible private credit market.

Credit Originators: For Credit Originators to truly scale their lending operations, they require access to long-term, committed capital from institutional TradFi asset managers who provide senior debt. However, TradFi asset managers have rigid conditions attached to their senior debt facilities. Broadly, these comprise: 1) proving an ability to manage ~$5M-$10M Loans under Management first; and, 2) sourcing a minimum amount of junior debt (~20%) to be subordinated to the senior debt.

Hence, the $5M-$10m part of the captial chain is broken!

Kasu solves this critical pain point through its full-stack, hybrid capital solutions throughout the Originator’s entire loan growth journey. This starts with enabling Originators to scale from initial smaller loan books entirely with DeFi capital via Kasu. Once scaled to a minimum loan book size that presents an attractive senior debt funding proposition to a TradFi asset manager, Kasu then arranges a larger senior debt facility with one of its investment bank or credit fund partners. At this point, the existing DeFi capital from Kasu is already in place to provide the minimum junior capital requirement to unlock significant funding from the senior lender.

In summary, Kasu partners with Credit Originators across their entire loan growth journey - from $0-$10m entirely funded by DeFi capital, to arranging its first senior debt facility with a boutique TradFi credit fund ($10-$50m lending) - all the way through to $100M+ though Kasu’s bulge bracket investment banking partners.

DeFi Lenders: Kasu addresses the challenge of access to institutional grade, validated real-world asset (RWA) opportunities by offering any DeFi lender (any size) access to the junior debt tranche of tokenized private credit deals that yield 15-25% APY. DeFi lenders take comfort in the depth of due diligence and risk assessment being handled by the institutional TradFi asset managers who fund the senior debt tranche, providing them with confidence and superior risk-adjusted returns. TradFi Asset Managers: Kasu resolves the pain point of asset managers sourcing high-quality, pre-vetted deal flow. Kasu conducts initial credit due diligence on Credit Originators and assists them scale with DeFi capital to a minimum size that presents an attractive proposition for TradFi asset managers to deploy senior debt. This ensures a pipeline of proven, scalable credit opportunities, facilitating growth and access to diverse asset classes for TradFi asset managers to grow their senior credit exposures. From boutique credit funds - up to multi-billion dollar investment banks - Kasu significantly reduced origination effort of high quality deals for TradFi asset managers.

PROBLEM 2: Lending is Commoditised with No Deep Value-Add

Let's use the analogy of a business whose cash is tied up in debtors. Such a business typically seeks an invoice finance loan to solve their cash flow problem. However, an invoice finance loan fails to solve the root cause of the problem, which is late debtor collections, thereby presenting increased credit risk to Lenders.

Whether it's credit funds, banks, or RWA lending platforms, financiers do not offer any value-add solution to solve the root cause of the cash flow problem. Consequently, they are subjected to fierce interest rate pricing competition, offering no value beyond the commodity of ‘money.' The 'commoditised' nature of the industry therefore results in minimal loyalty from borrowers and other stakeholders.

Whether it's credit funds, banks, or RWA lending platforms, financiers do not offer any value-add solution to solve the root cause of the cash flow problem. Consequently, they are subjected to fierce interest rate pricing competition, offering no value beyond the commodity of ‘money.' The commoditised nature of the industry therefore results in minimal loyalty from borrowers and other stakeholders.

Therefore, merely moving from TradFi to DeFi (or RWA lending) to circumvent overregulation, excessive fees, and untenable terms associated with traditional lending only solves a very small part of the problem. However, the systemic issues outlined above remain in place—they still exist, only now on-chain.

Kasu solves this problem through its , that optimises businesses' cash flow prior to lending funds.

Apxium’s innovative technology and unique credit structuring delivers higher risk adjusted returns than would otherwise be the norm for such creditworthy business borrowers. For its invoice financing product, higher risk-adjusted returns are achieved by Apxium’s ability to reduce debtor days by 50% with its AR automation technology, thereby lending to an optimised (de-risked) debtor book. For its Tax Pay product, Apxium is in a unique situation where creditworthy businesses are willing to borrow at higher costs than what their credit ratings would suggest their credit default spreads should be, creating an inelastic demand curve for Tax Pay.

This unique situation is driven by recent legislative changes imposed by tax/revenue authorities. Part of these changes no longer allow businesses to enter into low/no cost payment plans with the tax/revenue authorities, with legal enforcement proceedings imposed if tax obligations are not settled by their due dates. This has created an extremely high degree of urgency for businesses to seek immediate solutions that are fair and flexible, albeit willing to pay higher costs for. Through Apxium’s deep relationships with these business’ most trusted advisors (their accountants), Tax Pay is seen as a trusted solution to their problem.

Risk-adjusted returns are further optimised by Apxium’s lending workflow automation technology, which reduces the cost-to-serve, ultimately sharing these superior economies with Lenders through more attracting APY.

Apxium’s distribution moat - through its deep relationships with high profile accounting firms - along with its unique technology further adds to Lenders’ ability to achieve higher quality yields. This is summarised as follows:

• Lower Customer Acquisition Cost, thereby sharing such savings/economies with Lenders though more attracting APY.

• Automation software that lowers customer onboarding costs, and the cost-to-serve economics, also benefiting Lenders through the APYs offered.

• Proprietary Deal Flow, ensuring access to high quality, profitable clients from a highly trusted source to access the most creditworthy deals.

• Inelastic Demand, creating a unique situation where many low-risk businesses will pay funding costs than what their quality credit profiles would suggest.

Hence, Apxium is able to deliver a unique mix of economies of scale to benefit Lenders’ APY - along with charging a higher interest rate to businesses than what their credit risk profiles would suggest they should be paying as a credit default spread. This is unlike any competing RWA lending platforms, as they do not possess the technology and commercial relationships to achieve such unique risk-reward outcomes.

Apxium’s 'Professional Fee Funding' (PFF) Lending Strategy specialises in financing the invoices of high-creditworthy Accounting Firms in Australia, North America, and the U.K. The innovation behind this Lending Strategy is Apxium's proprietary IP, being its Accounts Receivable Automation software and Smart Payments technology.

The technology maximises these Accounting Firms’ cash flows before lending a single dollar against their invoices. The technology is currently used by high-creditworthy Accounting Firms across the U.S., Canada, Australia and the U.K, for which it manages over US$2.5b of annual invoices. This includes top 50 Accounting Firms in these regions, with the largest customer generating over US$500m annual invoicing/revenue, all managed by Apxium’s unique technology.

The technology works by automating the entire end-to-end accounts receivable workflows for Accounting Firms, before lending against their invoices, so that the borrowing need and default risk is minimised. This occurs by reducing debtor days by up to 50%, thereby significantly de-risking the borrower’s accounts receivable collections prior to advancing funds against its invoices.

Kasu is an RWA Real World Asset (“RWA”) business lending protocol that delivers hybrid DeFi +TradFi capital solutions across the entire funding lifecycle for lending business ("Credit Originators"). The outcome for everyday DeFi lenders ("Lenders") is financial democratisation, with access to the highest quality private credit yields, by lending alongside institutional TradFi credit funds.

Lenders' yields are enhanced through proprietary technology that optimises business borrowers' cash flows, thereby improving their credit risk. Ultimately, this aims to produce higher risk-adjusted yields for Lenders.

The protocol brings together both DeFi + TradFi Lenders with creditworthy ‘real world’ business borrowers (“End Borrowers”), all curated by industry leading Credit Originators that are exclusive to Kasu. This model delivers deep value across the entire capital chain as follows:

• 💼 Credit Originators get full-stack funding across the entire capital chain and loan growth journey.

Apxium’s Accounts Receivable Automation Software, combined with its Payments Technology, improves debtor days by up to 50%, reduces administrative overhead by 50%, and payment processing fees by 30%-40%. The technology is underpinned by the following Intellectual Property:

Remote Connectivity - Read & Write Access to Firms’ Practice Management Software (Accounting & Billing Systems)

• Remote read and write access to global cloud and on-premise Practice Management Software which is used by the largest Firms. These systems are not built for external cloud connectivity.

All accounting firms undergo full KYC/KYB, given that Apxium has already provided Payments Facilities during the onboarding process as an Accounts Receivables Automation software user. Approval for Professional Fee Funding is subject to further accreditation/approval as follows (exceptions may apply to stronger creditworthy borrowers):

Kasu operates on a unique time-based system of epochs (being a 7-day period) and Clearing Periods (being the final 48 hours of each epoch). Understanding how epochs and Clearing Periods work is important to understanding Kasu’s approach to efficient private credit lending and operational security.

While epochs introduce a slight delay between submitting Lending and Withdrawal Requests, along with key related actions and their execution, they allow Kasu to manage the liquidity requirements of Lending Strategies more efficiently and securely, benefiting all Lenders.

For example:

• 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).

The Kasu Oracle is a critical ecosystem component, providing real-time, accurate data essential for the platform's operations. It primarily focuses on updating the $KASU token price at the beginning of each epoch, ensuring all calculations involving $KASU tokens use the most current information.

This Oracle fetches price data from trusted sources, adding an extra layer of reliability and transparency to the Kasu ecosystem. Its automated updates maintain smooth platform operations without manual interventions.

The $KASU price provided by the Oracle is crucial for calculating Lender Loyalty Levels, based on Lenders' locked $KASU tokens and resultant rKASU balance and synthetic value. This ultimately affects lending and withdrawal priority, Protocol Fee Sharing and bonus APY.

For Lenders, the Kasu Oracle ensures that all operations involving $KASU tokens are based on fair, current market values. This contributes to the overall transparency and fairness of the Kasu platform, allowing you to make informed decisions around desired Lending Strategies and $KASU token management.

By leveraging this reliable price feed, Kasu maintains a stable and trustworthy environment for all participants in its private credit lending ecosystem.

The following provides a summary of the protocol features in context of how the Kasu ecosystem functions:

📊 Lending Strategies

The core of Kasu's ecosystem is its Lending Strategies. Kasu enables Credit Originators to offer a range of business lending opportunities with differing risk profiles and interest rate returns. As a Lender, you select Lending Strategies that align with your financial goals and risk tolerance. This provides Lenders with exposure to global private credit markets, which are uncorrelated to cryptocurrency markets.

📜 Lenders

Lenders are individuals, businesses and institutions who deploy capital to any of the Lending Strategies on Kasu. For smaller Lenders (who deploy less than 350,000 USDC), funds are not ‘pooled’ like a managed fund. Therefore, Kasu provides smaller Lenders with choice, transparency and control as to the various business lending opportunities available and the deployment of their funds from one End Borrower to another. This includes full disclosure of every End Borrower to which funds are deployed, with the opportunity to opt out within a designated timeframe. This level of choice and control provides Lenders with decision-making influence on how Credit Originators allocate capital.

⚪ Credit Originators

Credit Originators are seasoned lending businesses and risk managers of commercial loans. Each Lending Strategy offers an interest rate reflective of the credit risk associated with its underlying real world business borrowers. Credit Originators possess a historical track record of outstanding loan portfolio performance and credit quality. They bring unique proprietary deal flow, which is enhanced by Kasu’s technology that delivers superior risk management for the highest quality yields. An example of the calibre of Credit Originators that Kasu partners with is our launch partner, , an award-winning ‘SaaS+Fintech’ business. Through this partnership, Kasu and Apxium deliver innovative Accounts Receivable Automation Software and Smart Payments technology, ensuring the most intelligent working capital financing solutions for real-world businesses.

📶 Tranches

Each Lending Strategy is structured into three loan Tranches (or less) - Junior, Mezzanine, and Senior Tranches. Each Tranche has a distinct risk profile in terms of its ranking priority in the capital structure when it comes to the recovery of funds in the event of losses. This presents varied balances of risk and potential returns, which enables Lenders to tailor their approach and diversify risk within a single Lending Strategy, in line with their own risk tolerance.

💵 USDC Transactions

For simplicity and stability, all lending and withdrawals on Kasu are transacted in USDC, a regulated digital currency (stablecoin) issued by that is pegged to the US dollar. This ensures Kasu is able to source global capital in a manner which is borderless and cost effective for all stakeholders that is also highly regulated. Lenders deploy USDC into their preferred Lending Strategy, which is then converted to fiat currency for Credit Originators to original loans to End Borrowers. Kasu can facilitate the instant conversion of other cryptocurrencies to USDC on behalf of Lenders (via 1inch) during the Lending Request process, if required.

👛 $KASU Tokens

Whilst Lenders aren’t required to purchase the native Kasu token ($KASU) to participate in USDC lending, the lending experience is enhanced by locking $KASU to achieve certain utility and rewards. By locking the $KASU token for a minimum period, Lenders can participate in the Kasu loyalty program, which is designed in a manner that promotes Kasu’s commitment to inclusiveness, where any Lender can avail of the same utility and relative rewards, regardless of their wealth. This includes priority access and capital withdrawal to and from Lending Strategies, along with APY bonuses and Protocol Fee Sharing.

⌚ Epochs

Transactions on Kasu occur in weekly epochs, with a Clearing Period occurring within 48 hours of the end of the each given epoch. This system manages Lending and Withdrawal Requests in a batched clearing system, enabling Kasu algorithms to manage the liquidity status of Lending Strategies in terms of liquidity surpluses and shortage for more efficient capital allocation. The epoch system also manages weekly interest calculations efficiently and other key transactions. This system reduces on-chain transactions, thereby minimising potential vulnerabilities in the protocol.

The components outlined above bridge decentralised finance and traditional private credit markets. Lenders gain access to opportunities previously reserved for large institutions and High-Net-Worth individuals. End Borrowers benefit from optimised cash flows and improved credit risk management through Kasu's proprietary technology. Credit Originators fill the essential role of sourcing high quality opportunities that are exclusive to Kasu. They must possess a historical track record of outstanding portfolio performance and credit quality to validate their ability to ensure best-in-class risk management of Lenders’ capital.

This harmonious ecosystem maintains transparency and efficiency, aligning the interests of Lenders, End Borrowers and Credit Originators throughout the entire loan management lifecycle and lending value chain.

Apxium’s ‘Taxation Funding’ Lending Strategy - known as Tax Pay - is a FinTech lending innovation that solves the timing mismatch problem between cash revenues and tax expenses for profitable creditworthy businesses. The solution leverages Apxium’s Smart Payments technology to deliver automated payments on behalf of businesses, direct to their creditors in a wide range of currencies, with customisable approval mechanisms built-in to reduce payment fraud risk.

The genesis of Tax Pay came about through Apxium’s existing Accounting Firm user base (see Professional Fee Funding’ Lending Strategy), who are also the Tax Agents of their clients. As ‘trusted advisors,’ Tax Agents constantly seek ways to assist with cash flow ‘smoothing’ solutions for their profitable, creditworthy business clients, whose revenue cycles do not coincide with the timing of the rigid tax payment cycle obligations imposed by tax/revenue authorities.

These Tax Agents therefore requested Apxium solve this problem through its innovative FinTech lending IP. These relationships have secured a valuable source of proprietary deal flow for Apxium, which is able to leverage these highly credible Accounting Firms as a trusted source to access their most creditworthy clients.

Hence, Tax Pay was born after considerable consultation with Apxium’s Accounting Firm clients. This process revealed significant unmet demand, with the opportunity to work with these accountants to identify high quality businesses that demonstrate strong business models and profitability, but are impacted by working capital constraints and sudden unexpected amendments to tax legislation (often applied retroactively).

The ‘commercial IP’ associated with these Accounting Firm relationships must not be underestimate. These Accounting Firms that Apxium services are well known, highly credible Firms. They are therefore highly selective with the clients they work with, thereby representing a high-quality source of deal flow for Apxium. Combined with their advocacy, Apxium gains much comfort in the quality of referrals, data and transparency. Unlike a broker introducer, these Firms are trusted advisors to their clients and therefore carry reputational risk if they were to refer a client to Apxium with sub-optimal credit default risk.

Tax Pay only focuses on the business clients of Apxium’s existing Accounting Firm clients. Whilst Apxium’s Accounts Receivable Automation Software is not a condition precedent to for these businesses to access Tax Pay, Lenders can take comfort in that only creditworthy business clients of Apxium’s strong Accounting Firms relationships will be eligible.

Apxium's Smart Payments Technology, combined with its deep relationships with highly credible Accounting Firms, delivers deep tangible value to both the Firm and its clients as follows:

1. Cash Flow Optimisation: Tax Pay completely removes the multiple seasonality issues for each tax obligation. Tax obligations come in various forms (income tax, Pay-As-You-Go (PAYG Tax), PAYG employee tax, GST, VAT etc.), presenting varying cash expense profiles (timing and amount) that rarely match a business’ cash revenue profile. Each of these individual tax obligations present ‘seasonality’ issues, as tax expenses must be paid in regular prescribed intervals regardless of the timing of the business’ cash revenue and working capital cycle.

2. Operational Efficiencies - Tax Agents: Accounting Firms (in their role as Tax Agent for their clients) spend significant time attempting to negotiate payment arrangements with the tax/revenue authority on behalf of their clients. The tax/revenue authorities are deliberately difficult to contact and must only act within certain predefined parameters which makes the entire process extremely inefficient and time consuming for the accountant. Tax Pay solves this problem for both the accountant and its clients, saving significant time, cost and waste.

3. Mitigate Legislative Risk: In Australia, various States are enforcing new tax rulings, which may be retrospective and progressive. Tax Pay ensures that businesses can access funding to meet such unforeseen liabilities. Adding to the problem is that the Australian and U.S. the tax/revenue authorities will no longer allow ‘affordable’ tax payment plans. In Australia, interest on such payment plans is no longer tax deductible either. In essence, recent changes have enforced a zero-tolerance stance on outstanding tax obligations, particularly for profitable businesses.

4. Overcome Bank Lending Covenants: Similarly, banks are resistant to renew credit lines until outstanding tax debts are settled. This situation is exacerbated in that tax/revenue authorities provided no/low interest tax payment plans to businesses during the COVID-19 pandemic, which have accrued to significant levels. Tax Pay therefore ensures that businesses are not restricted from accessing growth capital from their main banking relationships.

Eligibility and credit due diligence is undertaken with the assistance of borrowers’ Accounting Firms, with which Apxium holds deep relationships. Apxium already has some degree of credit history over these businesses, given Apxium’s visibility over their real time payment performance of accounting fees (i.e. Apxium’s AR Software and Payments Technology is fully data integrated with the receivables ledger of their Tax Agents' Practice Management Software). The depth of data integration is discussed in the .

The Accounts Receivable Automation Software and Payments Technology is deeply data integrated with Accounting Firms’ Practice Management Software. The depth of integration and real-time synchronicity provide real-time visibility over a Firm’s accounts receivable ledger and the payment status of every single invoice. Combined with the technology’s automated payment write-back (accounting journal entries) and payment reconciliation process, this ensures real-time debtor risk performance. The real time synchronisation also captures manual ledger adjustments, such as credit notes, reversals, cash payments etc., ensuring error free loan advance rate monitoring to mitigate the risk of loan-to-value (LTV) ratio covenant breaches.

Moreover, the Payments technology provides visibility over the identification and payments performance of every single client of the Accounting Firm. This level of transparency ensures real-time risk management, with risk metrics with Lenders to gain comfort over the performance of their loans.

The Accounts Receivable Automation Software and Payments Technology is deeply data integrated with Firms’ Practice Management Software. The depth of integration and real-time synchronicity provide real-time visibility over a Firm’s accounts receivable ledger and the payment status of every single invoice. Combined with the technology’s automated payment write-back (accounting journal entries) and payment reconciliation process, this ensures real-time debtor risk performance. The real time synchronisation also captures manual ledger adjustments, such as credit notes, reversals, cash payments etc., ensuring error free loan advance rate monitoring to mitigate the risk of loan-to-value (LTV) ratio covenant breaches.

Moreover, the Payments technology provides visibility over the identification and payments performance of every single client of the Firm. This level of transparency ensures real-time risk management, with risk metrics with Lenders to gain comfort over the performance of their loans.

Risk Vs Reward

Credit Originators offer a range of business lending opportunities on Kasu. Business lending opportunities are firstly segmented and categorised by broad common factors that influence risk and return (APY), such as industry sectors and/or lending asset classes. This common level of segmentation is known as a Lending Strategy.

Once a Lending Strategy is established in accordance with the above segmentation, Credit Originators may offer sub-segments (additional categories) of business lending opportunities within a single Lending Strategy. This occurs by structuring (or separating) a Lending Strategy into a maximum of three loan Tranches: Senior Tranche, Mezzanine Tranche and Junior Tranche.

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 a higher ranking priority, versus higher APY for a lower ranking position).

Apxium’s Payments Acquiring accreditation means it replaces each Accounting Firm’s transactional banking relationship (i.e., Apxium offers the same payment rails as banks but in a more innovative and cost-effective manner that is fully data integrated with Firms’ Practice Management Software). Combined with innovative Accounts Receivable Automation software, Apxium acts as the Firm’s Collections Agent, managed per the following funds flow explanation:

1. Apxium provides each Firm with a Payment Gateway through which their client debtors can pay their invoices (accounting fees).

2. Under Apxium’s Professional Fee Funding model, an Accounting Firm can offer its clients the ability to pay under standard invoice terms or via ‘instalments at a premium’ for up to 12 advance monthly instalments (11 actual full months)—directly via an embedded payment link on the invoice.

The Kasu protocol fee model derives 10% of the gross interest earned by Lenders. $KASU 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 $KASU Token Locker (who is also a Lender) is entitled is based on their balance of rKASU relative to all rKASU in the Kasu ecosystem. For example, in a scenario where a total of 1,000 rKASU exists in the entire Kasu ecosystem, a Token Locker (who is also a Lender) who has 150 of these rKASU would be entitled to 15% of all Protocol Fees allocated to $KASU Token Lockers. This proportionality is augmented as more Lenders’ $KASU tokens are locked (or unlocked) to generate more rKASU (or burn more rKASU), 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:

$KASU is the native token of the Kasu ecosystem. Whilst Lenders aren’t required to purchase $KASU to participate in USDC lending, the lending experience is enhanced by locking $KASU for a minimum period to achieve certain utility and rewards (subject to fluctuations in the $KASU price).

$KASU is a utility token that has a supply limited to one billion tokens. In order for Lenders to maximise the associated utility and rewards, $KASU must be locked for either 30, 180, 360 or 720 days. Each $KASU locking period will provide the Token Locker with a specific amount of temporary, non-redeemable and non-transferrable rKASU that will accumulate, so long as $KASU remains locked. A synthetic value is applied to rKASU (pegged to the $KASU price).

It is noted that to participate in Kasu Lending Strategies as a Lender, purchasing and locking the $KASU token is not a prerequisite. Anyone can buy and hold the $KASU token if they so wish. However, in order to avail of certain utility and rewards, a Token Locker must also be a Lender. Token utility and rewards are therefore maximised for Lenders who are also $KASU Token Lockers.

It is important for Lenders to understand that the $KASU token generation event is yet to occur. Kasu aims to launch its $KASU in due course. Any reference to $KASU Loyalty Levels, token utility and rewards in this document is therefore only relevant upon launch of the $KASU token. A total of 5% of the $KASU token supply is allocated to a Launch Bonus Locking Program, which rewards early $KASU Token Lockers with additional $KASU if they lock for longer periods. The reward structure for this bonus is as follows:

Note that the rKASU issued to Token Lockers (outlined previously) includes these bonus tokens in the calculation. For example, assume a $KASU Token Locker locks 1,000 $KASU for 360 days. They instantly receive 250 $KASU (derived from their 0.25x multiplier for that locking period) to be locked alongside their 1,000 $KASU. The result is a position of 1,250 KSU locked for 360 days. Subsequently, the rKASU multiplier of 0.5x is applied, corresponding to the locking period. This results in the $KASU Token Locker receiving 625 rKASU in addition to their $KASU deposit.

All borrowers undergo full KYC/KYB and AML onboarding. Credit approval is subject to further accreditation/approval as follows (exceptions may apply to stronger creditworthy borrowers):

Twitter/X –

Telegram –

Discord –

In some cases, it may be a condition imposed by Kasu that a Credit Originator must contribute a set amount (or a percentage of the total Lending Strategy amount) of its own funds as First Loss Capital. This depends upon the credit due diligence outcomes undertaken by Kasu on each Credit Originator. Should a Credit Originator be required to contribute first loss capital, these funds act as a capital reserve account that cannot be deployed into loans to earn interest. The purpose is to add further protection to Lenders by absorbing losses prior to the lowest ranking Tranche.

You can view whether a Credit Originator has contributed any First Loss Capital in the ‘Details’ tab of each Lending Strategy. It is noted that Kasu has undertaken Due Diligence on Apxium, and has not requested First Loss Capital. This decision was largely made on the basis of Apxium’s zero loss history after 8 years of lending.

There is no set minimum or maximum amount of First Loss Capital, and Kasu determines the appropriate amount to allocate based on the specific Lending Strategy, Credit Originator credit history and track record and associated risks.

In summary, First Loss Capital offers several benefits to Lenders:

• Enhanced Protection: It provides an extra buffer against potential losses, particularly benefiting those in higher-risk Tranches.

• Increased Confidence: Knowing that the Credit Originator has provided an additional layer of protection provides Lenders with more confidence in participating in the strategy.

• Alignment of Interests: By committing their own capital as First Loss, Credit Originators demonstrate accountability and confidence in their own risk management strategies.

While First Loss Capital provides added protection to Lenders’ capital, it's important to remember that it doesn't eliminate all risk for a given lending strategy. Kasu will typically request First Loss Capital from a particular Credit Originator that possesses higher risk than Credit Originators who are not required to contribute First Loss Capital.

An epoch is a fixed time period in the Kasu ecosystem, which occurs over 7 days. Here's what you need to know about epochs:

⏱️ Time Frame

Each epoch has a set duration of 7 days, providing a consistent schedule for all lending activities and associated transactions occurring within Kasu. Within the final 48 hours of each epoch, a Clearing Period occurs, during which time all transactions are determined/executed (Lending and Withdrawal Requests and associated transactions, along with Loyalty Level calculations, Protocol Fee Sharing etc.). If a Lending Request, Withdrawal Request or cancellation request has not been submitted prior to the commencement of the 48-hour Clearing Period, it will be carried over to the next 7-day epoch. Various sections of the Kasu platform display exactly when the next Clearing Period starts so Lenders can manage their transaction requests more efficiently.

💱 Continuous Operation

Epochs run continuously, with a new one starting immediately after the previous one ends.

🗣️ Lending and Withdrawal Requests

You can submit a Lending or Withdrawal Request at any time during an epoch. However, these requests are queued for processing during the final 48-hour period (Clearing Period) of the current epoch, and subsequently processed based on Tranche availability and Loyalty Level (in the case of Lending Requests) or capital available for withdrawal and Loyalty Level (in the case of Withdrawal requests). If a Lending or Withdrawal Request has not been submitted prior to the commencement of the Clearing Period (final 48 hours of each epoch), it will be carried over to the next 7-day epoch.

💸 Interest Accrual

Interest associated with Lenders’ loan balances accrues every epoch (every 7 days) for the specific Tranche, or Single Loan Offer (in the absence of Tranches), based on the below APY explanation. A Lender’s balance is therefore updated with interest earned at the start of every new epoch.

📊 Annual Percentage Yield (APY)

Given that interest accrues every epoch, APY represents the total effective interest return over a year assuming a Lender leaves both their principal and earned interest in the Lending Strategy without withdrawing funds. APY therefore takes into account the effect of compound interest (auto-compounding), unlike APR, which only shows simple interest. Therefore, if a Lenders withdraws any funds, their effective interest return may be lower than the stated APY.

📈 $KASU Token Price

For the purposes of Loyalty Level calculations, the $KASU token price is taken into consideration at the beginning of each new epoch.

Apxium’s technology can account for each individual tax obligation for each individual tax period. In the backend, this calculates a separate loan repayment schedule for each tax obligation. But, from the client’s perspective, a single monthly repayment is made. Apxium’s technology simply apportions the appropriate amount from this single monthly repayment and allocates it to the relevant outstanding tax obligation (in a first-in-first-out method).

This method enables the client to continually ‘roll in’ new tax obligations into the single consolidated facility (subject to a total approved credit limit and debt serviceability metrics), whilst earlier tax debts ‘roll off.’ Tax Pay allows business borrowers to take advantage of up to 3 monthly payment holidays in a 12 month period (so long as they have the approved facility limit capacity).

This flexibility is an important selling feature when compared to the inflexible and hardened approach of government revenue authorities and competing lenders whose non-existent relationships with target clients (and their accountants) sees them offering inflexible loans with predatory pricing and terms (akin to a ‘last resort lender’). Additionally, interest charges on a Tax Pay loan are completely tax deductible (i.e. the tax/revenue authorities in Australia no longer allow interest associated with their payment plans to be a tax deduction).

$KASU Token Lockers receive a temporary amount of non-redeemable and non-transferrable rKASU, regardless of whether they are also Lenders. However, utility and rewards are only experienced by Token Lockers who are also Lenders that achieve minimum Loyalty Levels. The amount (and synthetic value) and period of locked $KASU tokens determines a multiplier associated with the amount of rKASU that a Token Locker will receive as follows:

Given that the synthetic value of rKASU is pegged to the $KASU token price, any fluctuations in the $KASU price naturally affect the synthetic value of rKASU.

An example is given by a Token Locker who locks 100 $KASU for 30 days. The associated multiplier is 0.05x. The Token Locker will therefore receive 5 rKASU. Similarly, a Token Locker who locks 100 $KASU for 720 days will receive 100 rKASU. The utility and rewards associated with locking $KASU to accumulate rKASU are detailed in the following sections.

Kasu’s smart contracts provide a secure, transparent, and efficient lending platform for RWA private credit. One of the key features of Kasu's smart contract architecture is upgradability. This upgradeability means the platform can be updated and improved without disrupting existing lending activities.

This upgradeability means that Kasu can implement new features and optimisations to enhance the Lender experience and platform efficiency. If any vulnerabilities are discovered, they can be quickly addressed without compromising Lenders' funds. This upgradeability also allows Kasu to adapt its systems to ensure ongoing compliance as the regulatory landscape evolves. Additionally, this allows Kasu can scale efficiency, where it can be upgraded to handle increased usage and new types of Lending Strategies as the platform grows.

For Lenders, Kasu's smart contracts' upgradability means that you're participating in a platform that can evolve and improve over time, offering better features, security, and opportunities in the future. Any upgrades are designed to be backward-compatible, ensuring that existing Lenders' positions and balances are not impacted.

By combining the power of smart contracts with the flexibility of upgradability, Kasu provides a robust, secure, and future-proof platform for accessing RWA private credit opportunities.

Kasu’s Credit Originator launch partner and technology partner is an award-winning ‘SaaS+Fintech’ business, Apxium Technologies Ltd (“Apxium”). Through this partnership, Kasu and Apxium deliver innovative Accounts Receivable Automation Software and Smart Payments technology. This enables Kasu to offer innovative Lending Strategies underpinned by the most intelligent Receivables and Payables financing solutions for real-world businesses.

Lending Strategies are at the core of Kasu's unique product offering. They allow Lenders to participate in real-world private credit opportunities that are otherwise only available to wholesale and institutional investors, ensuring Kasu continues to democratise access to the highest quality business lending opportunities in an inclusive and equitable manner.

The following provides a summary of the key elements of Lending Strategies:

🧠 Lending Strategies

Kasu exclusively partners with proven Credit Originators that offer business lending opportunities to Lenders on Kasu. These business lending opportunities are segmented by industry sectors and/or lending asset classes known as Lending Strategies. Within each Lending Strategy, Credit Originators may offer additional categories of risk and return (APY) offers. This occurs by structuring (or separating) a Lending Strategy into a maximum of three loan Tranches: Senior, Mezzanine and Junior. This allows Credit Originators to offer additional segmentation layers of business lending opportunities to Lenders within a single Lending Strategy. Each loan Tranche offers a ranking priority in the capital structure in terms of recovery of funds in the event of losses.

⚪ Credit Originators

Credit Originators offer Lending Strategies to Lenders on Kasu. Credit Originators must exemplify a proven historical track record of outstanding loan portfolio performance and credit quality, demonstrating outperformance in their lending asset class specialisations. They bring unique proprietary deal flow, which is enhanced by Kasu’s technology that delivers superior risk management, ensuring Lenders are presented with the highest quality yields. They manage all loan servicing, repayments, credit underwriting, risk management etc. based on their proven track record.

🤝 Lenders

Kasu’s inclusive and equitable approach to democratising access to private credit markets allows all types of Lenders to participate (big or small). Lenders deploy USDC to the particular Lending Strategy(ies) and loan Tranche(s) that align with their financial objectives and risk profiles, by submitting a Lending Request. Kasu can also facilitate the conversion of certain cryptocurrencies to USDC via 1inch during the Lending Request process. Small Lenders (Lenders who typically deploy less than 350,000 USDC) are provided with choice and control over how Credit Originators deploy funds. They are informed exactly which End Borrowers their funds are loaned to at any given time, including the moment funds are redeployed to other End Borrowers. Further promoting control and choice for Lenders is the opportunity to ‘opt out’ within a prescribed time period of identifying an End Borrower to which funds will be deployed.

🕹️ Lender Choice, Transparency & Control

It is important to note that small Lenders’ funds within Lending Strategies are not ‘pooled’ like a managed fund (Lenders who typically deploy less than 350,000 USDC). Rather, they have control and choice over the deployment of their funds from one End Borrower to another. This process is curated by Credit Originators, with smaller Lenders provided with a high degree of choice to opt out of every time their funds are deployed from one End Borrower to another. Full transparency over the identification of each End Borrower is provided to such Lenders so they can be fully informed of their decision to opt in/out. As part of the opt in/out process, it is noted that Lenders will automatically opt in should they not otherwise notify Kasu within 48 hours of being informed of the deployment of their funds. Please refer to the for a detailed explanation.

This ultimately provides smaller Lenders with choice and control around the allocation of their capital, including decision-making influence around the degree of funding support provided to particular End Borrowers. It also empowers such Lenders to take control over their personal circumstances when it comes to the use of their capital.

📜 Real-World Lending

Funds in each Lending Strategy are used to finance loans to qualifying businesses in the 'real world,' by offramping USDC to fiat currency. For example, the currently available on Kasu provides funding to Accounting Firms in Australia and North America against their outstanding invoices that are yet to be paid by their clients, thereby enabling them to manage working capital more efficiently.

💲Interest Earnings

Lenders earn interest on their USDC loans, which is accrued on a per epoch basis (an epoch being every seven days) and added to each Lender's loan balance at the start of each new epoch. This is commonly referred to as capitalised interest, whereby Lenders can earn compound interest each week. Accessing interest earned occurs through the same mechanism as accessing initial loaned capital, requiring Lenders to submit a Withdrawal Request.

Given that interest accrues every epoch, APY represents the total effective interest return over a year assuming a Lender leaves both their principal and earned interest in the Lending Strategy without withdrawing funds. APY therefore takes into account the effect of compound interest (auto-compounding), unlike APR, which only shows simple interest. Therefore, if a Lenders withdraws any funds, their effective interest return may be lower than the stated APY.

👛 Withdrawal Process

Lenders can request to withdraw part, or all of their loan balance(s), which includes accrued interest. The acceptance of Withdrawal Requests is subject to the available liquidity within the specific Lending Strategy from which the Withdrawal Request is made.

⌚ Transaction Processing - Epochs and Clearing Periods

Kasu uses an epoch-based system to manage transactions associated with Lending Strategies in an orderly manner. At the end of each epoch (being every seven days), there is a Clearing Period (which occurs over 48 hours) during which time the outcome of Lending Requests and Withdrawals Requests is determined by the Credit Originator, based on liquidity requirements.

By participating in Kasu Lending Strategies, Lenders earn interest on their capital in return for supporting the operations and growth of real businesses in tier 1 economies. The diversity of Lending Strategies and loan Tranches allows Lenders to assess a range of business lending opportunities that suit their specific needs, each offering a unique APY based on the varying degrees of risk across their respective industry sectors and lending asset classes.

The combination of Apxium’s technology and proprietary risk structuring has enabled it to deliver significant risk-adjusted return arbitrage in private credit markets, underwritten by some of the highest creditworthy borrowers – being mid to large-tier Accounting Firms in Australia, the U.S., the U.K., and Canada.

Given that the cost of financing is ultimately borne by the Firm’s client debtor, but guaranteed by the Accounting Firm via Apxium’s unique security and risk structuring, this unlocks higher risk-adjusted returns as follows:

1. Risk-return Pricing Arbitrage: Interest pricing is based on the risk of the Accounting Firm’s debtor, but with full security given by the significantly higher creditworthy Accounting Firm, over which Apxium has recourse.

2. De-risked Debtor Book: Apxium’s technology reduces debtor days by up to 50%, thereby lending to an optimised debtor book. Accounting Firms are able to therefore unlock cash tied up in working capital to meet growth objectives, which in turn provides comfort to Lenders of superior risk management of their capital for optimal risk-adjusted returns.

3. Real-time Risk Insights: Apxium’s data integration IP with the Practice Managing (Billing) Software used by Accounting Firms also ensures the most sophisticated risk reporting, with real-time visibility over every invoice payment status, debtor payment, and external transactions recorded on the receivables ledger.

4. Innovative Credit Structuring - Automated Risk Backstop Mechanisms: Apxium’s unique data integration of its Payment Rails with Firms’ Practice Management Systems, combined with its innovative security structuring, ensures automated risk backstops, proven through having never incurred a loss in over its entire 8 years of existence.

Hence, Kasu delivers deep value-add across the entire lending value chain. Other RWA lending platforms merely lend money, which is a commoditised product. Kasu provides technology that maximises cash flow to reduce the borrowing need for business borrowers, thereby optimising risk management to deliver superior-quality yields to Lenders.

Apxium's Accounts Receivable Automation software and Global Payment Rails delivers deep tangible value to Accounting Firms as follows:

1. 50% Debtor Days Reduction: The technology automates the entire invoice presentment process while enabling Accounting Firms to offer their clients flexible and frictionless payment experiences. The resulting reduction in debtor days de-risks the Accounting Firm's debtor collections by up to 50%, while unlocking cash tied up in debtors before advancing funds against its invoices.

2. 50% Reduced Administrative Overhead: The depth of automation reduces waste and administrative overhead by 50%, thereby unlocking more cash flow for the Firm.

3. 30-40% Reduced Payment Processing Fees: The Payment Rails completely replaces the Firm's transactional bank, reducing payment processing fees by up to 40%.

The end-to-end Accounts Receivable Automation workflowprovided by the technology is demonstrated as follows:

$KASU is the native token of the Kasu ecosystem. While not required to participate in USDC Lending, locking $KASU tokens provides Lenders with tiered Loyalty Levels to enhance the lending experience. This assumes all other factors remain constant in terms of no adverse fluctuations related to the $KSU token price.

When you lock $KASU tokens, you receive rKASU that will accumulate, so long as $KSU remains locked. A synthetic value is applied to rKASU (pegged to the $KASU price). The amount and duration of locked $KASU tokens determines a multiplier associated with the amount of rKASU that a Token Locker will receive as follows:

For example, if you lock 100 $KASU for 30 days, you'll receive 5 rKASU. If you lock the same amount for 720 days, you'll receive 100 rKASU.

The synthetic value of your rKASU, relative to your total USDC lending (inclusive of queued Lending Requests) determines your Loyalty Level and the extent of utility and rewards you will receive, which comprises the following:

1. 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).

2. APY bonus, paid in $KASU tokens.

3. Priority for Withdrawals from Lending Strategy.

4. Priority access to Lending Strategies.

Loyalty Levels, as they relate to the the extent and amount of the above utility and rewards, are fully detailed in the next section.

All end borrowers undergo full KYC/KYB and AML onboarding. Approval for a Tax Payment Loans is subject to further accreditation/approval as follows (exceptions may apply to stronger creditworthy borrowers):

Apxium’s Accounts Receivable Automation Software, combined with its Payments Technology, improves debtor days by up to 50%, reduces administrative overhead by 50%, and payment processing fees by 30%-40%. The technology is underpinned by the following Intellectual Property:

Remote Connectivity - Read & Write Access to Firms’ Practice Management Software (Accounting & Billing Systems)

• Remote read and write access to global cloud and on-premise Practice Management Software which is used by the largest Firms. These systems are not built for external cloud connectivity.

It's important to understand that Withdrawal Requests, like Lending Requests, are not processed immediately, but during the final 48-hour period (Clearing Period) at the end of each 7-day epoch.

The key information related to the Withdrawal Request process is summarised as follows:

1. Once you submit a Withdrawal Request, it will remain queued until the end of the current 7-day epoch with the outcome determined during the Clearing Period (the final 48 hours of the epoch).

2. If you didn't manage to submit your Withdrawal Request before the start of the Clearing Period (the start of the final 48 hour period of the 7-day epoch), then it'll remain queued and carry over to the next epoch.

Recall in the that the Senior Tranche offers the lowest APY and carries the lowest risk, as it has the highest priority ranking position among Kasu Lenders in the capital structure to claim recoveries (if available). The Mezzanine Tranche offers a higher APY due to its second ranking position, with the Junior Tranche offering the highest APY due to its lowest ranking priority.

Unrealised Losses Vs Realised Losses

The accounting mechanism for losses on Kasu is based on the concept of Unrealised Losses and Realised Losses. This allows Kasu to apportion losses and recoveries in an orderly manner across the capital structure and the associated Tranches.

For example, if an End Borrower is in default of their loan obligation to the point where the Credit Originator expects there to be a loss, but the loss is yet to materialise, an Unrealised Loss is recorded by the Credit Originator. The Credit Originator will subsequently enforce a formal recovery action, which may include exercising its security position. Any funds that aren't recovered during this process are then recorded as a Realised Loss.

Apxium's Accounts Receivable Automation software and Global Payment Rails delivers deep tangible value to Accounting and Law Firms as follows:

1. 50% Debtor Days Reduction: The technology automates the entire invoice presentment process while enabling Firms to offer their clients flexible and frictionless payment experiences. The resulting reduction in debtor days de-risks the Firm's debtor collections by up to 50% while unlocking cash tied up in debtors before advancing funds against its invoices.

2. 50% Reduced Administrative Overhead: The depth of automation reduces waste and administrative overhead by 50%, thereby unlocking more cash flow for the Firm.

Understanding the mechanisms through which interest is earned by Lenders can help maximise returns when lending on Kasu.

During the Clearing Period at the end of each weekly epoch, interest is calculated and then accrued and auto-compounded into your balance, and reflected in your updated loan balance at the beginning of each 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.

Accordingly, Lenders can earn compound interest (i.e. earn interest upon interest) every epoch (compounded every 7 days).

Given that interest accrues every weekly epoch, APY represents the total effective interest return over a year assuming a Lender leaves both their principal and earned interest in the Lending Strategy without withdrawing funds. APY therefore takes into account the effect of compound interest (auto-compounding), unlike APR, which only shows simple interest. Therefore, if a Lenders withdraws any funds, their effective interest return may be lower than the stated APY. Refer to the Section for full details.

A Lender's Loyalty Level also influences total APY. As explained in the, Lenders can boost earnings through bonus interest, paid in $KASU tokens. This assumes all other factors remain constant in terms of no adverse fluctuations related to the $KASU token price affecting a Lender's Loyalty Level.

It's important to note that 10% of interest earned by Lenders is deducted as fees, with half this amount allocated towards Protocol Fee Sharing for Lenders, and the remaining half to the Kasu protocol to fund operations. No fees are applied to Lenders’ bonus interest. Therefore, the APY quoted on the Kasu dApp refers to Gross APY (before fees). Refer to 'Fees Explanation and Gross APY Disclosure' in the

The combination of Apxium’s technology and proprietary risk structuring has enabled it to deliver significant risk-adjusted return arbitrage in private credit markets, underwritten by some of the highest creditworthy borrowers – being mid to large tier Accounting Firms in Australia, U.S., U.K. and Canada (and now also targeting law firms). Apxium provides a unique Whole Lender Funding facility to these high creditworthy Accounting Firms. This includes technology and payment rails to manage automated invoice presentment to their clients with embedded payment links, all the way through to automated receipting and reconciliation upon collection of payment via Apxium’s global payment rails.

Apxium has experienced feedback from its Accounting and Law Firm clients that the extent to which their cash is tied up in WIP and debtors is severe. This working capital constraint impacts both organic and inorganic growth. As a result, there is significant unmet demand for a fully integrated AR Automation + Payments + Whole Ledger Funding solution that not only provides funding against the late debtor collections problem, but also fixes the problem at its core. This deep value-add solution unlocks a higher risk-adjusted returns as follows:

1. De-risked Receivables Ledger: Apxium’s technology reduces debtor days by up to 50%, thereby lending to an optimised (de-risked) receivables ledger, with up to half the credit exposure that otherwise would have been in place.

Apxium's technology provides several layers of risk insights for smarter risk management. This starts with its deep data integration with the Practice Management Software utilised by the tax agents of borrowers, which provides a preliminary view into the payment performance of their clients, prior to entering into a loan contract. Once Apxium enters into loan contract with a borrower, its automation software and Smart Payments Tech adds a deeper layer of value and risk management. This is detailed as follows:

• Risk insights - Payment Performance Data: given Apxium provides Accounting Firms with the payment gateway through which their clients pay their accounting fees, a history of their clients’ payment performance data is at hand. Combined with Open Banking data, this provides deeper insights into clients’ capacity to meet their creditor obligations to ensure only the highest credit quality borrowers are selected to optimise risk-adjusted returns for Lenders.

• Identity Validation: Apxium’s data integration with its Accounting Firm clients’ Practice Management Software provides visibility over the identity of their clients. This enables a higher degree of pre-qualification than other financiers' ‘cold calling’ sales methods.

A Clearing Period occurs at the end of each epoch during a 48-hour period at which certain lending activities, and related transactions, are processed

🧤 Lending & Withdrawal Request Processing

All queued Lending and Withdrawal requests are processed during the final 48 hours of each epoch, based on Lender Loyalty Levels. Recall that loan Tranche allocations may be adjusted to accommodate submitted requests if a Lending Strategy is oversubscribed.

Apxium’s ‘Whole Ledger Funding’ Lending Strategy specialises in financing the Accounts Receivable and Work-in-Progress (WIP) ledgers of high-creditworthy Accounting and Law Firms in Australia, North America, and the U.K.

As discussed in previous sections, Apxium core IP lies in its proprietary Accounts Receivable Automation Software and Smart Payments technology, which delivers the most intelligent Receivables and Payables financing solutions for real-world businesses. This technology has proven to reduce debtor days by up to 50% for mid to large tier Accounting Firms in Australia, U.S., Canada and the U.K., unlocking cash tied in debtors, thereby de-risking the Receivables ledger before lending a single dollar.

This has been tested and validated over 8 years of Apxium’s existence through its to Accounting Firms, which boasts 0% historical loss rate. This success over such a long period of time has now experienced feedback and unmet demand from these clients for an integrated Whole Ledger Funding solution to unlock cash tied up in both WIP and Receivables.

This experience has enabled Apxium to achieve significant credibility among some of the largest accounting firms in the world. Moreover, these learning outcomes have resulted in significant intellectual capital with an intricate understanding of Accounting and Law Firms’ operations and risks to design the optimal Whole Ledger Funding Solution. This includes demand from Law Firms, who experience such working capital problems to a greater extent than Accounting Firms.

Given the lack of innovation and technology offered by competitors, they are yet to develop a data integrated solution with Practice Management systems used by Accounting and Law Firms that can track monthly WIP and real-time Receivables, and therefore adequately manage risk. This has unlocked a significant market opportunity for Apxium.

Lenders loaning funds through the Kasu platform (Kasu lenders) should be aware that Kasu’s lending to the Credit Originator (Apxium) is now contractually subordinated to a senior loan facility (Facility Agreement) provided by a separate senior lender to the same Credit Originator under a subordination and priority deed.

In the ordinary course, repayments to Kasu lenders continue as normal; however this may be impacted in the event that the Credit Originator fails to meet its obligations to the senior lender under the Facility Agreement. These obligations are a combination of financial and procedural, including repayment and reporting obligations. Should the Credit Originator breach its obligations to the senior lender, repayments to Kasu lenders may be halted unless and until the Credit Originator takes specific rectification action.

This subordination and priority arrangement means:

• Kasu’s right to repayments from the Credit Originator (which underpins the repayments to Kasu lenders) is subordinate to the senior lender’s rights under the Facility Agreement. Therefore, in the event that the Credit Originator fails to meet its obligations under the Facility Agreement, then Kasu lenders may be adversely impacted as follows:

  • The senior lender has priority claim over loan repayments, collateral, and recovery proceeds.

  • Kasu lenders are indirectly exposed to this subordination risk, as their capital is lent to Kasu, which in turn holds a subordinated loan position.

  • Repayments to Kasu (and consequently to Kasu lenders) may be delayed, reduced, or lost if the senior lender’s claims are not fully satisfied first.

  • While the Facility Agreement and the subordination and priority deed are in place, Kasu faces restrictions on enforcement rights, receipts of payments, and disposition of recoveries, potentially impacting its ability to meet obligations to Kasu lenders on time and in full.

  • There is no obligation on the senior lender to marshal assets or take actions beneficial to Kasu or Kasu lenders, potentially limiting recovery prospects for subordinated loans.

• As a result, lending through the Kasu platform entails a higher credit and liquidity risk relative to lending by the senior lender, including elevated risk of delayed payment, or partial or total loss, of principal and yields (interest).

• Pursuant to the Facility Agreement, the senior lender is providing funding to the Credit Originator across the entirety of the senior tranches of the Credit Originator’s Lending Strategies. As a result, Kasu lenders may only access, where available, mezzanine and junior tranches across the Credit Originator’s Lending Strategies. In the case that the Credit Originator provides access to the senior tranche of any of its Lending Strategies to Kasu lenders, such loans remain subordinate to the senior lender under the Facility Agreement and subordination and priority deed.

Lenders should carefully consider these risks in their lending decisions.

It's important to understand that Lending Requests are not processed immediately, but during the final 48-hour period (Clearing Period) at the end of each 7-day epoch.

The key information related to the Lending Request process is summarised as follows:

1. Once you submit a Lending Request, it will remain queued until the end of the current 7-day epoch with the outcome determined during the Clearing Period (the final 48 hours of the epoch).

2. If you didn't manage to submit your Lending Request before the start of the Clearing Period (the start of the final 48 hour period of the 7-day epoch), then it will remain queued and carry over to the next epoch.

3. During the Clearing Period, the Credit Originator will determine its liquidity requirements.

4. At the end of the Clearing Period, the outcome of your Lending Request will be determined as Accepted or Rejected.

5. Only after it is Accepted will it appear in My Portfolio > Lending Portfolio.

To determine the status of your Lending Request as it transitions through the above process, visit My Portfolio > Transactions tab and scroll down to the Detailed Lending Request Transactions Section per the below image.

This section displays a table which reveals the status of your Lending Request prior to being Accepted or Rejected, along with subsequent transactions after it has been Accepted. The table displays the following columns and components:

Column 1: Last Transaction Date:

• Displays the date of the most recent transaction as it relates to the Lending Request Status. For example, the first row shows that on 18.01.2025 (Column 1), a Lending Request for 50 USDC was submitted (per Column 4).

• Once the outcome of the Lending Request is determined - such as Accepted or Rejected - the Last Transaction Date will be updated accordingly.

• The most recent transaction date will always appear at the top of this table in line with any changes marked in the Lending Request Status (Column 4).

Column 2: Lending Strategy

• Displays the Lending Strategy to which the transactions relates.

Column 3: Tranche

• Displays the loan Tranche within the Lending Strategy to which the transaction relates.

Column 4: Lending Request Status

• Displays all the stages that may occur leading up to the Lending Request being Accepted or Rejected. These stages comprise:

  • Requested: For the purposes of this explanation, refer to the first row which shows a Lending Request was submitted for 50 USDC to the Senior Tranche of the 'Whole Ledger Funding' Lending Strategy. Regardless of the outcome, the record of this Lending Request will remain, and therefore, 50 USDC will always appear should you wish to view a history of all your Lending Requests.

  • Cancelled: If you decide to cancel your 50 USDC Lending Request, it will be marked as Cancelled. Should you wish to Cancel your Lending Request, you must do so prior to the commencement of the Clearing Period. Once the Clearing Period commences, you will no longer be able to cancel your Lending Request. You can cancel your Lending Request by clicking on the View Details

• A glossary of the transaction breakdown details that display in the modal is as follows:

Top half of the modal, which provides a breakdown of all the transactions leading up to the outcome of your Lending Request

Bottom half of the modal, titled 'RWA Loan Deployment Status (Post Acceptance),' which displays all the transactions that occur after your Lending Request is Accepted

Once you've completed the KYC or KYB process, you're ready to start your journey as a Kasu Lender. The subsequent section will provide full details on how to start lending on Kasu.

Before you get started, please ensure your Web3 Wallet is connect to Base mainnet.

1. Fund Your Web3 Wallet: Transfer USDC to your Web3 wallet. Alternatively, Kasu can convert certain cryptocurrencies to USDC via 1inch, which you'll notice during the Lending Request process.

2. Explore Lending Strategies: Browse the available Lending Strategies offered by our Launch Partner Delegate, Apxium.

3. Understand the Risks: You can familiarise yourself with Apxium’s background and historical track record via the Lending Strategy Overview and Details Sections. You can also download a full Strategy Deck in the Overview Section to undertake a deep dive into each Lending Strategy including how it works and how risk is managed. There is also a risk metrics dashboard outlining the historical performance of each Lending Strategy in the Risk Reporting Section. Please also refer to the and Sections for further details.

4. Choose Your Lending Strategy and Loan Tranche: Select your desired Lending Strategy and respective loan Tranche, based on your financial goals and risk tolerance. You can learn more about this in the .

5. Submit a Lending Request: Specify the amount you wish to lend and wait until the end of the epoch to see if your Lending Request is accepted or rejected. Visit the My Portfolio > Transactions tab on the Kasu platform (ensuring your Web3 wallet is connected) to track the status and outcome of your Lending Request (see below image). It is important to note that interest earnings do not start accruing until your Lending Request has been accepted.

1. Monitor Your Lending: If your Lending Request is accepted, track your loan and interest earnings through the My Portfolio > Lending Portfolio tab (per below image) on the Kasu platform (ensuring your Web3 wallet is connected).

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

2. Stay in Control and Exercise Choice: For Lenders with less than 350,000 USDC deployed (total existing loans and queued Lending Requests), Look out for emails from [email protected] 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’ 48 hours before your funds are deployed. Please refer to the 'Automated Opt-In' Section of the for full details.

Remember, higher Loyalty Levels provide priority access to popular Lending Strategies, along with withdrawal priority, bonus APY and Protocol Fee Sharing. This is fully outlined in section.

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 Section which provides essential details and specific risk associated with lending on Kasu, along with the for more general risks.

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.

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

The extent to which a Lender benefits from the utility of Lending Strategy access and withdrawal priority, along with rewards of APY Bonus and Protocol Fee Sharing, is dependent upon Loyalty Levels. A Lender's Loyalty Level is determined by their synthetic rKASU value relative to existing USDC lending (inclusive queued Lending Requests).

As noted by the below formula, the synthetic value of rKASU is pegged to the value of $KASU. This value of rKASU is referred to as a synthetic value, given that it is non-transferable, non-redeemable and temporary. I.e. it only remains in place whilst $KASU remains locked and is therefore burned once unlocked (Token Lockers retain their $KASU tokens once unlocked, of course).

Therefore, rKASU and its synthetic value simply exists for the calculation purposes of Lender Loyalty Levels. The formula applied is as follows:

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

Loyalty Level 1

If the synthetic value of a Lender’s rKASU balance, relative to their total combined value of current USDC lending (inclusive of queued USDC Lending Requests) across all Lending Strategies exceeds 0% but is less than 1%, then the Lender will achieve Loyalty Level 1.

This entitles the Lender to the following utility and reward:

• Share of Kasu Protocol Fees paid in USDC, determined by the Lender’s rKSAU relative to all Lenders’ rKASU.

Loyalty Level 1 does not entitle the Lender to the following utility and rewards:

• Priority access to Lending Strategies available on Kasu including loan Tranches in the case that they are oversubscribed.

• Priority for Withdrawal Requests from existing Lending.

• Additional interest (bonus interest) on all lending on Kasu, awarded in $KASU tokens (subject to change according to liquidity demand and supply requirements).

For example, a Lender has 1,500 USDC in existing lending, and a further 100 USDC queued Lending Requests (that have yet to be accepted). The Lender has also purchased and locked 200 $KASU for 30 days. The 0.05x rKASU multiplier (per the previous section) provides the Lender with 10 rKASU. For the purposes of this calculation, it is assumed that the current price of $KASU is 1 USDC. Therefore, the synthetic value of the Lender’s 10 rKASU is 10 USDC.

Based on the formula outlined above, this ratio of the Lender’s rKASU to current USDC lending (inclusive of queued Lending Requests that have yet to be accepted) is as follows:

rKASU Synthetic Value ÷ (Current Lending + Queued Lending Requests) The resultant output demonstrates that it is greater than 0% but is less than 1%, providing the Lender with Loyalty Level 1:

10 USDC ÷ (1,500 USDC + 100 USDC) =0.63%

Loyalty Level 2

If the synthetic value of a Lender’s rKASU balance, relative to their total combined value of current USDC lending (inclusive of queued USDC Lending Requests that are yet to be cleared) across all Lending Strategies equals 1%, but is less than 5%, then the Lender will achieve Loyalty Level 2. This entitles the Lender to the following utility and rewards:

• Second order priority access to Lending Strategies available on Kasu including loan Tranches in the case that they are oversubscribed (behind Loyalty Level 3)

• Second order priority for Withdrawal Requests from existing Lending (behind Loyalty Level 3) but only for variable interest rate loans (not fixed interest rate loans).

• Additional interest (Loyalty Level 2 bonus interest) on all lending on Kasu, awarded in $KSU tokens (subject to change according to liquidity demand and supply requirements).

• Protocol Fee Sharing based on the Lender’s rKASU relative to all Lenders’ rKASU, paid in USDC.

For example, a Lender has 400 USDC in existing lending, and a further 100 USDC queued Lending Requests (that have yet to be accepted). The Lender has also purchased and locked 200 KSU for 30 days. The 0.05x rKASU multiplier (per the previous section) provides the Lender with 10 rKASU. For the purposes of this calculation, it is assumed that the current price of $KASU is 1 USDC. Therefore, the synthetic value of the Lender’s 10 rKASU is 10 USDC.

Based on the formula outlined above, this ratio of the Lender’s rKASU to current USDC lending (inclusive of queued Lending Requests that have yet to be accepted) is as follows:

rKASU Synthetic Value ÷ (Current Lending + Queued Lending Requests)

The resultant output demonstrates that it exceeds 1%, but is less than 5%, providing the Lender with Loyalty Level 2:

10 USDC ÷ (400 USDC + 100 USDC) =2%

Loyalty Level 3

If the synthetic value of a Lender’s rKASU balance, relative to their total combined value of current USDC lending (inclusive of queued USDC Lending Requests that are yet to be cleared) across all Lending Strategies equals 5% or greater, then the Lender will achieve Loyalty Level 3. This entitles the Lender to the following utility and rewards:

• First order priority access to Lending Strategies available on Kasu (including loan Tranches in the case that they are oversubscribed).

• First order priority for Withdrawal Requests rom existing lending but only for variable interest rate loans (not fixed interest rate loans).

• Additional interest (Loyalty Level 2 bonus interest) on all lending on Kasu, awarded in $KASU tokens (subject to change according to liquidity demand and supply requirements).

• Protocol Fee Sharing based on the Lender’s rKASU relative to all Lenders’ rKASU, paid in USDC.

For example, a Lender has 100 USDC in existing lending, and a further 30 USDC queued Lending Requests (that have yet to be accepted). The Lender has also purchased and locked 200 $KASU for 30 days. The 0.05x rKASU multiplier (per the above table) provides the Lender with 10 rKASU. For the purposes of this calculation, it is assumed that the current price of $KASU is 1 USDC. Therefore, the synthetic value of the Lender’s 10 rKASU is 10 USDC.

Based on the formula outlined above, this ratio of the Lender’s rKASU to current USDC lending (inclusive of queued Lending Requests that have yet to be accepted) is as follows:

rKASU Synthetic Value ÷ (Current Lending + Queued Lending Requests) The resultant output demonstrates that it exceeds 5%, providing the Lender with Loyalty Level 3:

10 USDC ÷ (100 USDC + 30 USDC) =7.69%

Lenders who have not had their Withdrawal Request fulfilled (Accepted) after 5 Epochs will outrank all published Loyalty Levels, (exceeding Loyalty Level 3 in the example provided above), regardless of their existing Loyalty Level (if at all). These Withdrawal Requests will therefore be processed first, during the next Clearing Period, to ensure operational compliance and integrity. However, despite the loyalty hierarchy, a Credit Originator may apply forced withdrawals at its discretion any time and this takes precedence over all other requests.

Upon maturity of a $KASU locking period, any amount of $KASU can be unlocked. There is no requirement to unlock the entire amount. However, once $KASU is unlocked, the proportionate balance of rKASU is burned. This may adversely affect the Loyalty Level should the remaining value of rKASU relative to current and pending USDC lending falls below 5% (for Loyalty Level 3) or below 1% (for Loyalty Level 2).

Given that a key driver of the Loyalty Level formula depends upon the price of $KASU (to derive the synthetic value of rKASU), token price fluctuations will also affect Loyalty Levels (both positively and negatively).

The Kasu Loyalty Level system is specifically designed for inclusiveness, regardless of a Lender’s wealth or socio-economic background. This is achieved by the ratio driven formula of rKASU relative to USDC lending (including queued Lending Requests), as opposed to rewarding absolute USDC lending balances. This enables a Lender with just 1,000 USDC lending to achieve greater utility and relative rewards (higher priority access and withdrawal priority, along with higher APY bonus) than a Lender with, say, 1,000,000 USDC deployed into loans.

Kasu may add additional Loyalty Levels at any time to provide additional increments of utility and benefit. Similarly, it may reduce the number of Loyalty Levels.

Interest Earnings Calculation

At Kasu, 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.

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).

Weekly Gross Interest Formula

To convert the Annual Percentage Yield (APY) into a weekly interest rate, Kasu uses the following formula:

((1 + APY)^(1 / 52.17857)) - 1

Where:

• APY is expressed as a decimal (e.g. 16% APY = 0.16)

• 52.17857 represents the number of weeks in a year, based on 365.25 days ÷ 7

💡 Why 365.25 days, not 365? Every four years, we add an extra day (February 29) to the calendar — a leap year — to stay aligned with the Earth’s orbit. Over time, this averages out to 365.25 days per year, which equals 52.17857 weeks.

Using this more precise figure ensures your compounded interest is calculated as accurately as possible — especially over longer timeframes.

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.

Net Interest (After Platform Fee)

Kasu 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:

(((1 + APY)^(1 / 52.17857)) - 1) × 90%

🔍 Example — 16% APY

• Weekly Gross Interest: ((1 + 0.16)^(1 / 52.17857)) - 1 ≈ 0.00289 (≈ 0.289%)

• Weekly Net Interest: 0.00289 × 90% ≈ 0.00260 (≈ 0.260%)

Assume your starting, initial loan balance is $10,000:

• By the end of the first weekly epoch, $26 interest is accrued onto your balance. Your balance then becomes $10,026.00 and is reflected in your portfolio at the start of the new epoch.

• But, assuming no withdrawals, your weekly interest increases due to the effect of auto-compounding — with no action needed.

Here's how:

✅ After 52 epochs (1 year):

• Weekly interest grew from $26 per epoch to $30.21 per epoch due to the effect of auto-compounding

• Your balance grew from $10,000 → $11,698.21

• You earned $1,698.21 in net interest

• That’s exactly 16% APY, thanks to auto-compounding each week

Summary for Lenders

• ✅ Accrued and auto-compounded: Interest is automatically added to your balance at the end of each epoch

• ✅ APY reflects compounding: Don't divide APY by 52 or 365 — it will understate your actual return

• ✅ 365.25 days = 52.17857 weeks: Used to reflect leap years and keep compounding calculations precise

• ✅ Actual return may vary

When you're ready to withdraw your funds from a Lending Strategy, you can initiate a Withdrawal Request at any time. It is noted, however, that this only applies to variable APY loans. I.e. you will not be able to submit a Withdrawal Request from any fixed APY loans, given that you would have agreed to the fixed rate term upon entering into this lending arrangement.

It is also important to understand that like all other transactions, Withdrawal Requests must be submitted prior to the commencement of the Clearing Period, which commences 48 hours prior to the end of the 7-day epoch.

To submit a Withdrawal Request from a variable APY loan, the following steps are necessary:

1. Connect your Web3 wallet.

2. Visit the Lending page of the Kasu platform where all the Lending Strategies appear.

3. Click on the Overview button of the relevant Lending Strategy you would like to withdraw your funds from.

4. Scroll down to the Your Lending Section and click the Withdraw button. Note that if your Web3 wallet is connected and you don't see any Lending Balance appear in this Section, the Withdraw button will be inactive, meaning you do not have any funds in this particular Lending Strategy to withdraw.

5. You will then be prompted to enter the USDC amount you would like to withdraw, along with the Tranche you'd like to withdrawal your funds from.

6. Follow the prompts until you received confirmation that your Withdrawal Request is sucessfully queued.

The fulfilment (acceptance) of your Withdrawal Request first depends on the available liquidity in each Lending Strategy. If there's insufficient liquidity, your Withdrawal may not be fulfilled (or only partially fulfilled), in which case, the unfulfilled portion will remain queued for the next epoch.

Your Loyalty Level also plays a role in influencing the priority of Withdrawal Requests. Higher Loyalty Levels result in higher priority relative to other Withdrawal Requests with lower (or no) Loyalty Levels, which is beneficial during periods of high withdrawal demand.

You can request to withdraw any amount of your lending balance. Interest is calculated up to the point when your withdrawal is fulfilled at the end of the epoch. Similarly, any End Borrower losses that occur whilst your Withdrawal Request is still queued will also affect your balance (including the amount of Withdrawal Requests that are yet to be fulfilled). Once complete, the withdrawn funds are transferred to your Web3 wallet as USDC.

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 (even if you do not have a Loyalty Level). Please refer to for further details.

Withdrawal Request Process

Kasu’s Credit Originator launch partner and technology partner is an award-winning ‘SaaS+Fintech’ business, Apxium Technologies Ltd (“Apxium”). Through this partnership, Kasu and Apxium deliver innovative Accounts Receivable Automation Software and Smart Payments technology, ensuring the most intelligent Receivables and Payables financing solutions for real-world businesses. The deep value-add of this technology is exemplified by three core Lending Strategies currently available on Kasu:

Our Accounts Receivable Automation Software and Smart Payments technology solves the root cause of business' working capital constraints through the following value proposition:

• 50% Debtor Days Reduction: The technology automates the entire invoice presentment process for End Borrowers, whilst enabling them to offer their clients flexible and frictionless payment experiences. The resulting reduction in debtor days de-risks the borrower's debtor collections by up to 50%, while unlocking cash tied up in debtors before advancing funds against its invoices.

• 50% Reduced Administrative Overhead: The depth of automation reduces waste and administrative overhead by 50%, thereby unlocking more cash flow for the End Borrower.

• 30-40% Reduced Payment Processing Fees: Our Global Payment Rails completely replaces the End Borrower's transactional bank, reducing payment processing fees by up to 40%.

Full details on how this technology works is outlined in each of the three Lending Strategy Sections.

All lending via Kasu flows to the Credit Originator of the Lending Strategy chosen to originate and manage loans to End Borrowers, which comprise creditworthy 'real-world' businesses. These business loans are underpinned by real-world cash flows and security structuring. Credit Originators originate Business Lending Opportunities according to their own credit due diligence policies and manage all loan servicing, credit risk, covenant reporting, repayments, recovery action, exercising their security (collateral) position etc.

This is all disclosed within the Overview and Details tabs of each Lending Strategy, including a full detailed overview in the Strategy Decks provided, which can be downloaded via the Overview tab. Credit Originators may take security (collateral) over End Borrowers as a means of recovering funds (if possible) in the event of losses. They may also use a Tranching structure to set ranking priority claims to the recovery of funds (if any) in the event of losses.

Apxium - Kasu's technology partner and launch Credit Originator - currently offers three Lending Strategies with the following credit frameworks and security structuring.

Lending Strategy 1: Professional Fee Funding

Lending Strategy 2: Whole Ledger Funding

Lending Strategy 3: Taxation Funding

For the Professional Fee Funding and Whole Ledger Funding Lending Strategies, it is a Condition Precedent that End Borrowers must utilise Apxium’s Accounts Receivable Automation Software and Payments Technology. This technology is deeply data integrated with Firms’ Practice Management Software with real-time synchronicity. This ensures real-time visibility over a Firm’s accounts receivable ledger and the payment status of every invoice. Combined with the technology’s automated payment write-back (Accounting journal entries) and payment reconciliation process, this ensures real-time debtor risk performance. The real time synchronisation also captures manual ledger adjustments, such as credit notes, reversals, cash payments etc., ensuring error free loan advance rate monitoring to mitigate the risk of loan-to-value ratio covenant breaches.

Moreover, the Payments technology provides visibility over the identification and payments performance of every single client of the Accounting Firm. This level of transparency ensures real-time risk management, with risk metrics with Lenders to gain comfort over the performance of their loans.

With regard to formal Financial Covenants and Reporting Covenants, the following is required by End Borrowers (noting this may be subject to change, along with variations applied to suit differing credit profiles):

Professional Fee Funding

• Provision of Annual Financials.

• Apxium’s data integration with the Firm’s Practice Management Software ensures real time, automated reporting associated with: collections performance; outstanding/paid invoices; Aged Receivables reporting and more (see above).

Whole Ledger Funding

• NTA min $500k

• DSCR 1.1x

• Collateral and Fees Account to maintain a minimum cash balance, subject to weighted average invoice size

• Month End WIP Reporting (opening, movement, write-off and invoiced)

Taxation Funding

• Annual Provision of statutory financial reports

• Monthly Provision of Integrated Activity Statement & Tax Accounts

• Minimum Debt Service Coverage to be maintained at 1.1x

• Minimum Net Tangible Assets (NTA) > $200k to be maintained

At Kasu, we're committed to providing users with a secure and compliant platform that adheres to global best practice regulations around preventing financial crimes such as money laundering and terrorism financing. Our Know Your Customer (KYC) identity verification process for individuals, and Know Your Business (KYB) identify verification process for non-individuals (such as companies, associations or trusts), are essential to this commitment. This section will guide you through the steps to complete your KYC/KYB verification on Kasu.

Before you can start lending funds on Kasu, you must complete KYC (for individuals) or KYB (for non-individuals) process. This helps us maintain a safe user environment and comply with regulatory requirements.

Know Your Customer (KYC)

Simply visit to get started. Otherwise, you can initiate a Lending Request on Kasu, and you will be prompted to complete KYC as part of this process.

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.

Before you get started, please ensure your Web3 Wallet is connect to Base mainnet.

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 Credit Originator, 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 for full details regarding fixed APY loans.

5. Understand the Risks: You can familiarise yourself with the Credit Originators’ 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 for a detailed overview of the broader risks.

6. Consider $KASU Token Utility: Consider whether you’d like to avail of the $KASU 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 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 . 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 Credit Originator, 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 Credit Originator 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 [email protected] 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 for full details.

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 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 which provides essential details and specific risk associated with lending on Kasu, along with the for more general risks.

Kasu’s Credit Originator launch partner and technology partner is an award-winning ‘SaaS+Fintech’ business, Apxium Technologies Ltd (“Apxium”). Through this partnership, Kasu and Apxium deliver innovative Accounts Receivable Automation Software and Smart Payments technology, ensuring the most intelligent Receivables and Payables financing solutions for real-world businesses. The deep value-add of this technology is exemplified by three core Lending Strategies currently available on Kasu:

Professional Fee Funding (PFF) and Whole Ledger Funding (WLF)

Apxium’s ‘Professional Fee Funding’ (PFF) and ‘Whole Ledger Funding’ (WLF) Lending Strategies specialise in financing the invoices of high creditworthy Accounting Firms (for PFF) and Work-in-Profess + Receivables ledgers of Accounting and Law Firms (for WLF) in Australia, North America, and the U.K. The Accounts Receivable Automation and Smart Payments technology maximises these Firms’ cash flows before lending a single dollar against their invoices and receivables by delivering deep value-add as follows:

• 50% Debtor Days Reduction: The technology automates the entire invoice presentment process. The resulting reduction in debtor days de-risks Firms’ debtor collections by up to 50% while unlocking cash tied up in debtors before advancing funds against invoices.

• 50% Reduced Administrative Overhead: The depth of automation reduces waste and administrative overhead by 50%, thereby unlocking more cash flow for the Firm.

• 30% - 40% Reduced Payment Processing Fees: The Payment Rails completely replaces the Firm's transactional bank, reducing payment processing fees by up to 40%, thereby delivering even deeper value-add.

This technology driven risk and security structure has been proven and validated over 8 years of its existence, with an impressive 0% historical loss rate.

The Accounts Receivable Automation Software and Payments Technology is deeply data integrated with Firms’ Practice Management Software. The depth of integration and real-time synchronicity provide real-time visibility over a Firm’s accounts receivable ledger and the payment status of every single invoice. Combined with the technology’s automated payment write-back (accounting journal entries) and payment reconciliation process, this ensures real-time debtor risk performance. The real time synchronisation also captures manual ledger adjustments, such as credit notes, reversals, cash payments etc., ensuring error free loan advance rate monitoring to mitigate the risk of loan-to-value (LTV) ratio covenant breaches.

Moreover, the Payments technology provides visibility over the identification and payments performance of every single client of the Firm. This level of transparency ensures real-time risk management, with risk metrics with Lenders to gain comfort over the performance of their loans.

The technology is underpinned by the following Intellectual Property:

Remote Connectivity - Read & Write Access to Firms’ Practice Management Software (Accounting & Billing Systems)

• Remote read and write access to global cloud and on-premise Practice Management Software which is used by the largest Firms. These systems are not built for external cloud connectivity.

• SQL access enables data interrogation to create invoices and remotely write payments data (journaled) back into the Practice Management system ledger with no manual (human) intervention.

Real-Time Data Synchronisation

• External/manual transactions outside of Apxium’s payment gateway (refunds, credit notes, reversals etc.) are updated in Apxium invoices in real time, and reflected in cloud hosted merchant and client portals.

• This real-time synchronicity makes payment errors, duplicate payments, etc., impossible.

Bank Agnostic Payments Acquiring (Global Payment Rails)

• Apxium replaces the Firm’s transactional bank and provides bank-agnostic payment facilities for credit card and direct debit (ACH) at 30-40% savings.

• As an accredited Payments Acquirer, Apxium has visibility over every debtor/payer, enabling its write data integration IP to perform the most accurate and automated write-backs (journal entries) to the PM system.

This IP ensures the most sophisticated risk reporting with real-time visibility over every invoice payment status and debtor payment, along with every external transaction recorded in the underlying receivables ledger.

Comprehensive details around this technology are provided in the and Sections.

Taxation Funding (Tax Pay)

Apxium’s ‘Tax Funding’ Lending Strategy - known as Tax Pay - is a FinTech lending innovation that solves the timing mismatch problem between cash revenues and tax expenses for profitable creditworthy businesses. The solution leverages Apxium’s Smart Payments technology to deliver automated payments on behalf of businesses, settled directly to their creditors in a wide range of currencies, with customizable approval mechanisms built-in to reduce payment fraud risk. In the case of Tax Pay, funds are settled directly to the Revenue Authority (i.e. Australian Taxation Office (ATO) in Australia and Internal Revenue Services (IRS) in the U.S.).

Apxium’s technology can account for each individual tax obligation for each individual tax period. In the backend, this calculates a separate loan repayment schedule for each tax obligation. But, from the client’s perspective, a single monthly repayment is made. Apxium’s technology simply apportions the appropriate amount from this single monthly repayment and allocates it to the relevant outstanding tax obligation (in a first-in-first-out method).

This method enables the client to continually ‘roll in’ new tax obligations into the single consolidated facility (subject to a total approved credit limit and debt serviceability metrics), whilst earlier tax debts ‘roll off.’ Tax Pay allows business borrowers to take advantage of up to 3 monthly payment holidays in a 12 month period (so long as they have the approved facility limit capacity).

This flexibility is an important selling feature when compared to the inflexible and hardened approach of government revenue authorities and competing lenders whose non-existent relationships with target clients (and their accountants) sees them offering inflexible loans with predatory pricing and terms (akin to a ‘last resort lender’). Additionally, interest charges on a Tax Pay loan are completely tax deductible (i.e. the tax/revenue authorities in Australia no longer allow interest associated with their payment plans to be a tax deduction).

Eligibility and credit due diligence is undertaken with the assistance of borrowers’ Accounting Firms, with which Apxium holds deep relationships. Apxium already has some degree of credit history over these businesses, given Apxium’s visibility over their real time payment performance of accounting fees (i.e. Apxium’s AR Software and Payments Technology is fully data integrated with the receivables ledger of their Tax Agents' Practice Management Software).

Comprehensive details around this technology are provided in .

Work-in-Progress (WIP) Funding

A credit due diligence process is undertaken in order to establish a WIP funding limit. This process determines a firm’s ‘baseline’ maintainable WIP on a ‘normalised’ basis. Once the baseline WIP is sized, 50% LVR (for Accounting Firms) or 40% LVR (for Law Firms) is applied to establish the facility limit. In the case of WIP compression (reduction) from the baseline, LVR cannot exceed 70% (Accounting Firms) or 60% (Law Firms). Notwithstanding the LVR increase associated with WIP compression, funding cannot exceed the established facility limit. The process is summarised as follows:

1. Apxium provides a portal through which firms upload their monthly WIP.

Risks

All lending carries risk. Different Lending Strategies may also carry different levels of risk. Some of the risks of lending on Kasu are as follows:

General risks

Prospective Lenders should understand that all lending carries varying degrees of risk, including the potential for loss of some or all of a Lender’s income and/or capital, a less than expected interest rate return (APY), and delays in End Borrower repayments and Lender Withdrawals. When considering a Lending opportunity, it is important to consider such things as:

• The risks involved in Lending in a particular Lending Strategy;

• The extent that the Lending Strategy fits your financial objectives and goals; and

• Your risk appetite.

It is generally considered that opportunities offering potentially higher returns (APY) also carry a higher level of risk. Lenders should seek their own independent financial advice before lending on Kasu.

Income and capital risks

Risks attaching to Lending on Kasu include (but are not limited to):

• You may not receive the interest return you expected; and/or,

• You may lose some or all of your capital.

The degree of income and capital risk associated with Lending on Kasu relate to the financial performance of Credit Originators and their End Borrower customers, to which your funds are on-lent. This will be affected by factors including End Borrowers’ ability to repay their loans and Credit Originators' competence in credit diligence, credit risk structuring and risk management.

Neither Kasu, nor any of its directors, employees and contractors, nor any other related company or Credit Originators, guarantee the performance of the loans or the repayment of loaned capital. Loans on Kasu are subject to credit (and other) risks. This could involve delays in repayment of Loans, loss of some or all of interest returns and capital, and interest returns that fluctuate.

Performance and default risk

Your lending balance can increase based on interest earned, and it can decrease based on any losses and defaults caused by End Borrowers. Interest earnings are not guaranteed, and you may lose money. Interest rates (APY) vary, so future interest returns may differ from past interest returns.

Currency exchange risk Lenders deploy USDC (or a cryptocurrency that is swapped to USDC via 1inch), which Credit Originators convert to fiat currency to originate business loans to End Borrowers. Credit Originators also convert fiat currency to USDC to meet Withdrawal Requests from Lenders and other forms of repayments. These transactions carry currency exchange risk. Given that not all fiat loans will be denominated in US Dollars (e.g. loan will also be originated in AUD, GBP and CAD), currency exchange rate risk is highly evident. This risk is exacerbated by the varying durations of Lenders' loan timeframes (given by the volume and unpredictability of how often Withdrawal Requests are submitted), versus the duration of each loan to End Borrowers, for which there will inevitably be mismatched durations.

Where deemed appropriate, Credit Originators may use currency hedging instruments to mitigate such risks. However, this does not fully mitigate potential losses associated with exchange rate risk. Consequently, in the event that such exchange rate risk cannot be mitigated, Lenders may suffer losses.

Market risk

Changes in financial markets, interest rate markets, the economy, political changes, technological developments, global or local-specific events and changes in market sentiment continually affect the risk of lending. These market risks can affect End Borrowers’ ability to repay loans, which in turn, may cause defaults and losses.

Interest rate risk

Changes in interest rates can directly and indirectly affect your lending balance and interest returns. For example, an increase in official interest rates may result in increased default risk to End Borrowers, affecting their ability to repay loans, which in turn, may cause defaults and losses.

Credit risk

Credit risk is the risk that the Underlying Borrowers (End Borrowers) may not meet their obligations in full and not pay interest and repay capital or other financial obligations on time. In the case that this results in losses, the balance of your lending may reduce. Examples of credit risk include where the End Borrower is a business and becomes insolvent or under external administration, or a guarantor is an individual and becomes bankrupt or dies.

All lending to Kasu is completely unsecured, which increases risk compared with secured lending. Kasu on-lends Lenders’ funds to Credit Originators, who on-lend to End Borrowers. There is no direct security taken by Lenders over Kasu or Credit Originators. Credit Originators seek to reduce credit risk by taking security over End Borrowers for the benefit of Lenders. Credit Originators also provide choice of loans across a range of End Borrowers, industries and geographic sectors. Credit Originators employ a range of risk management strategies and credit structuring to reduce credit risk where possible.

Credit Originator counterparty risk

Kasu does not guarantee the performance of Credit Originators and their End Borrower customers. All credit due diligence, credit underwriting and credit risk management related to End Borrowers is undertaken by Credit Originators. Kasu accepts no responsibility for any losses. This includes the potential failure and credit risk of a Credit Originator.

Protocol risks

The Kasu protocol could terminate. Fees could increase. There is no guarantee that the Lending Strategies offered on Kasu will perform successfully and as intended.

$KASU token price risk

The $KASU token is subject to price volatility. If you lock $KASU to avail of the token’s utility and benefits, negative price fluctuations in the token may negate some, or all, of these benefits and may even fluctuate to the point where you may be in a less favourable overall position than if you didn’t purchase and lock $KASU to achieve utility and benefits.

Smart contract risk

As with any RWA (real world asset) lending protocol, bugs or errors in the code, as well as malicious actors exploiting vulnerabilities, could lead to unexpected or incorrect results and financial losses to Lenders. Smart Contracts on Kasu have undergone audits to address such potential risks; however there is no guarantee that audits are or will be successful in identifying errors in the code and Lenders use the protocol at their own risk.

End Borrower concentration risk

Lending Strategies may be subject to some degree of concentration risk, being the risk associated with Credit Originators that may only on-lend to a limited number of End Borrowers, thus increasing the risk if an End Borrower fails to repay its loan.

Credit Originator concentration and $KASU token price risk

At the current point in time, Apxium is the only Credit Originator Kasu has partnered with. This not only presents concentration risk in the event that the Credit Originator and/or its End Borrower clients fail, but also presents risk to $KASU token holders. For example, if Apxium ceased participating as a Credit Originatoron Kasu, then the $KASU token may no longer have utility, which in turn, may affect the $KASU token price significantly.

Tranche risk

In the event of any end borrower defaults, Senior Tranche Lenders are paid first from any recovered funds, but this still depends on the overall recovery rate. In the event that less than 100% is recovered, losses are proportionately applied across Lenders in the lowest ranking tranche first (Junior Tranche), proceeding up the line through Mezzanine Tranche (if applicable) and finally to Senior Tranche. This proportionality is applied in line with the abovementioned ranking order, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to (i.e. any losses borne by the Lending Strategy are mutualised across Lenders starting from the lowest ranking tranche).In the absence of Junior and Mezzanine Tranches, losses are proportionately applied across all Lenders in the single available tranche.

Political, legal and regulatory risks The regulatory environment for cryptocurrencies is still evolving. New regulations or changes in existing laws can impact the operation of RWA lending platforms (and DeFi in general), potentially leading to closures, additional compliance requirements, unanticipated expenses or other challenges that could affect Lenders and End Borrowers. As above, it is important for users to understand and manage these and other risks before participating in activities on the Kasu protocol. Kasu has engaged a Tier 1 global legal firm to seek advice around the regulatory environment in which Kasu operates.

Liquidity (withdrawal) risk

This arises when there is insufficient liquidity in a strategy to facilitate smooth withdrawals, which may result in Lenders being unable to withdraw funds as and when required.

Cyber (data security and electronic delivery) Risk

Because your lending on Kasu is on the blockchain and fully online, which relies on computers, information technology (IT) networks and the internet, it is subject to inherent IT risks including (but not limited to) software and smart contract bugs, computer viruses and malware, unauthorised interference with data, loss of data, unavailability or unreliability of the internet, computer malfunction, network vulnerabilities, latency, and cyber hacking resulting in the theft of data. The online Kasu platform may be unavailable from time to time. You will need to consider the potential for disruption or other difficulties when planning to use Kasu and the dApp.

No guarantee

None of Kasu and its related entities, officers or personnel, or Credit Originators on Kasu, guarantee the performance of your loans, or the repayment of any loan amount, or the interest returns. Lending on Kasu is entirely at the risk of Lenders. No one and no entity makes any representation as to the success or otherwise of your lending on Kasu.

1. Introduction

The following Privacy Policy (Policy) is applicable to the lending platform (including any applicable websites and mobile applications used to access the same) (collectively the “Platform”) known as Kasu Finance provided by Kasu Reg No# 402812 (“Kasu”) (“Kasu”, “we, “us”, or “our”). It describes how we collect, use, and disclose Personal Information that we obtain from current or prospective customers or users (“you” or “your”) of the Platform and any services provided through the Platform.

For the purpose of this Policy and associated Platform Important Information, “Personal Information” refers to any information that relates to an identified or identifiable individual. We do not consider Personal Information to include information that has been anonymised, where it does not identify a specific user.

Kasu is bound by the Australian Privacy Principles contained in the Privacy Act 1998 (Cth) when handling your Personal Information. This Policy applies in addition to and does not limit our rights and obligations under Privacy Laws.

2. Your acknowledgment of this Policy

By providing us with, or authorising us to collect, your Personal Information, you acknowledge that you have read and understood this Policy and consent to the collection, use, and disclosure of your personal information in accordance with this Policy and any other arrangements that apply between us.

If you do not want your Personal Information to be used or disclosed as described in this Privacy Policy, you should not use this Platform, technologies, products and or functionalities offered by the Platform (Collectively, the “Services”).

3. Information Collected

3.1 We collect these types of Personal Information

(a) Non-Personally Identifiable Information. The first type is non-personally identifiable data and statistical information. Non-personally identifiable data that is being gathered consists of technical information and behavioral information that does not pertain to a specific individual (“Non-Personal Information”). This includes your device type, browser type and version, IP data, screen size and resolution, language and other technical data. While it is not specifically personally identifiable, it may be reverse-engineered to be identifiable and therefore is considered Personal Information.

(b) Personally Identifiable Information. The other type of information we may collect is individually identifiable information. To put it simply, this information identifies an individual or is of a private and/or sensitive nature, such as your contact information and financial data, including:

(c) Your contact details, which include your email address, phone number, full name, date of birth, gender, residential address, and postal address.

(d) Your financial data, including the details of financial transactions you conduct using the Platform and your web3 wallet addresses you connect to the Platform

(e) Your documents and data uploaded in our Know-Your-Customer (KYC) and/or Know-Your-Business (KYB) process, including a photocopy of your government issued ID, passport, driver’s licence, occupation and place of work, a video containing your image, your proof of address and utility bills, and other data filled in our forms such as your source of wealth and source of funds.

3.2 Sensitive Information

(a) This information is a class of Personally Identifiable Information and involves any data that directly or indirectly reveals information about a person’s ethnic or racial origin, political or philosophical opinions, religious beliefs, criminal records, sexual orientation, or any data related to the health records of the person, such as physical, psychological, mental, or genetic conditions.

(b) We will not collect Sensitive Information about you without your consent unless an exemption or exception applies. These exemptions or exceptions include if the collection is required or authorised by law, or if it's necessary to take appropriate action in relation to suspected unlawful activity or serious misconduct.

4. How do we collect your Personal Information?

We collect your Personal Information in the following ways:

(a) When you visit our Platform. When you visit our Platform, we collect information sent to us by your computer, mobile phone, or other access device. This information may include your IP address, browser type, operating system, and other device characteristics or identifiers;

(b) When you engage with our Services. Prior to using our Services, we collect information such as your name, email address, phone number, date of birth, residential address, and postal address. We may also collect additional information, such as your driver's license and passport number or other information, to verify your identity or address;

(c) When you use our Services. When you use our Services, we collect information about your transactions and other activities on our Platform. This information may include the amount of value you send or receive, the date and time of the transaction, and the recipient's name and address. We may also collect information about your computer or other access device for fraud prevention purposes;

(d) To protect against fraud and misuse. We may collect information about your use and interaction with our Platform to help protect against fraud and misuse of your Personal Information. For example, we may evaluate your computer, mobile phone, or other access device to identify any malicious software or activity that may affect the availability of our Services; and

(e) Other ways. We may also collect additional information from or about you in other ways, such as interactions with our customer support team via or

5. What are the purposes of the collection and processing of your Personal Information?

We may collect, hold, use, and disclose your Personal Information for the purposes of:

(a) Providing you with the services you have requested. We use your Personal Information to provide you with the Services;

(b) Communicating with you about your account and transactions. We use your Personal Information to communicate with you about your account and transactions, such as sending you confirmation emails;

(c) To protect our users and the Platform from fraud and other illegal activities. We use your Personal Information to protect our users and the Platform from fraud and other illegal activities, such as screening for suspicious activity and enforcing our terms of service;

(d) Improving our service and the Platform. We use your Personal Information to improve our service and the Platform, such as developing new features, fixing bugs, and measuring the effectiveness of our marketing campaigns;

(e) Delivering direct marketing, service update notices, and promotional offers based on your communication preferences. We may use your Personal Information to deliver direct marketing, service update notices, and promotional offers to you. We will only do this where you have opted in to receive these communications; and

(f) Complying with applicable laws and regulations. We may use your Personal Information to comply with applicable laws and regulations, including but not limited to those related to anti-money laundering and KYC.

6. How can we contact You?

If you use our Services, we may contact you with periodic updates and promotional emails relating to the service and the products or Services we offer.

You may opt out of these at any time, but not from transactional emails, such as emails directing you to the Platform relating to opting in or out of Loan(s) to End Borrowers.

Moreover, if you showed interest in one of our products or Services, we may contact you in relation to such product or service by email.

7. Right to access, edit, update or delete

You can access, request corrections, update, or request deletion of your Personal Information we have collected at any time by contacting us via Discord or Telegram. We will respond to your request within a reasonable period of time, but no later than the time period required by all applicable laws.

8. Circumstances in which we may not be able to accommodate your request

(a) Please note that notwithstanding the foregoing, there may be circumstances in which we are unable to accommodate a request to edit, update, access, or delete Personal Information. This includes but is not limited to:

(i) any basis where such request can be denied under applicable law;

(ii) where we need to retain the information to comply with federal, state, or local laws or for accounting or tax purposes;

(iii) where we need to comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state, or local authorities;

(iv) where we need to cooperate with law enforcement agencies concerning conduct or activity that the business, service provider, or third party reasonably and in good faith believes may violate federal, state or local laws;

(v) where we need to retain information to exercise or defend legal claims;

(vi) where the information contains legal privilege or proprietary information of another party; or

(vii) where complying with the request would compromise others’ privacy or other legitimate rights.

(b) If we determine that we cannot respond to any request in any particular instance, we will provide you with an explanation of why that determination has been made and a contact point for any further inquiries. To protect your privacy, we will take commercially reasonable steps to verify your identity before responding to any request under this provision, including complying with any applicable legal requirement for verifying your identity.

(c) To the extent permitted by applicable laws, we reserve the right to charge you a reasonable fee for the handling and processing of your requests to access your Personal Information, where applicable. If we so choose to charge, we will provide you with a written estimate of the fee we will be charging. Please note that in many jurisdictions, we are not required to respond to or deal with your access request unless you have agreed to pay the fee.

9. Sharing Personal Information with Third Parties

Your personal information may be disclosed to third parties for purposes described in this Policy or described in any other specific and additional privacy provisions that apply to certain products and Services provided by the Platform. We may disclose your personal information to the following third parties (as distinct from the member of the Platform to whom you have provided your Personal Information):

(a) Our partners for the purpose of assisting us in the KYC process and providing any further support needed to use our Services;

(b) Any third-party service providers carrying out functions for or on behalf of the Platform or any of its affiliates worldwide;

(c) Any person acting on your behalf, including your solicitor, accountant, executor, administrator, trustee or guardian;

(d) Government agencies, law enforcement or regulatory agencies and bodies or other third parties as required by, and in accordance with, applicable law and regulations;

(e) Any other third party with your consent or where authorised or required by law.

10. Location of your Personal Information

The Personal Information collected from you, as detailed in this Policy, may be transferred to and stored at servers that may be located in countries outside of Australia and in countries according to our third-party providers' standard contractual obligations.

It may also be processed by us and our suppliers, service providers or partners' staff operating outside Australia.

We are committed to protecting your Personal Information and will take reasonable steps to ensure that your Personal Information is processed and stored securely and in accordance with the Australian Privacy Principles, as detailed in this Policy. Such steps include putting in place data transfer agreements or ensuring our third-party service providers comply with our data transfer protection measures.

By submitting your Personal Information through the Platform, you acknowledge and agree, in a jurisdiction where such consent is required, to such transfer, storing and/or processing of Personal Information

11. Cookies

11.1 We use both first party and third-party cookies when you access our Platform. Cookies are small text files placed in your computer browsers to store your preferences. Our Platform, and our third-party partners, collect and store information that is generated automatically as you use it, including your preferences and anonymous usage statistics.

11.2 We collect information about your device and use tracking mechanisms such as cookies to:

(a) Facilitate customer use of our Platform;

(b) Enable customisation of our online services and website features;

(c) Avoid customer re-entry of data;

(d) Store customer preferences for certain kinds of information;

(e) Enhance security measures; and

(f) Gather data about usage of our website and mobile applications for research and promotions.

11.2 We use cookies from third party service providers to facilitate website tracking and security measures and may share the information collected with third parties acting as our service providers, who are required to maintain the confidentiality of the information.

11.3 We use these cookies and other technologies on the basis that they are necessary for the performance of a contract with you, or because using them is in our legitimate interests (where we have considered that these are not overridden by your rights), and, in some cases, where required by law, where you have consented to their use.

12. Security

We take reasonable steps to preserve the security of the personal information we collect. Your Personal Information is held in an environment with reasonable security measures consisting of either physical measures, electronic measures or a combination of both.

We have implemented security procedures, controls, and protocols across all of our physical premises and electronic environments to minimise the risk of interference, loss, misuse, unauthorised access, modification, or disclosure of Personal Information.

However, due to inherent risks in transmission of information over the Internet or other methods of electronic storage, we cannot guarantee that unauthorised access or use will never occur.

We will comply with applicable law in the event of any breach of the security, confidentiality, or integrity of your Personal Information and will inform you of such breach if required by applicable law.

To the extent that we implement the required security measures under applicable law, we shall not be responsible or liable for unauthorised access, hacking, or other security intrusions or failure to store or the theft, deletion, corruption, destruction, damage, or loss of any data or information included in the Personal Information

13. Data Retention

We will retain the Personal Information for as long as we believe that it is accurate and can be relied upon. Personal Information that is no longer required for the purpose for which it was initially collected will be deleted unless we have a valid justification to retain it that is permitted under applicable law, such as to resolve disputes or comply with our legal obligations.

14. Data Breach Notification

We comply with Notifiable Data Breaches (NDB) in data breach notifications. If there is an actionable breach of your Personal Information, we will notify you within 72 hours.

15. European Supervisory Authority

If you are based in Europe, you have the right to make a complaint at any time to the supervisory authority of the country in which you are based. We would, however, appreciate the chance to deal with your concerns before you approach a supervisory authority so please contact us via Discord or Telegram in the first instance.

16. Contact Us

If you have questions, concerns, or complaints regarding this Policy or the handling of your Personal Information, you may contact us via Discord or Telegram.

17. Your right to lodge a Compliant

If you are located in Australia, where you have made a privacy related complaint, we will respond to your complaint by no later than 30 days after receipt. If you are not satisfied with our response to your complaint, or your concerns are not satisfactorily resolved, you may contact the Office of the Australian Information Commissioner on 1300 363 992 or by email at [email protected].

18. Updates to this Policy

This Policy is current as of the Effective Date set out above. We may change our Policy from time to time and, if and when we do so, the updated Policy will be published to our Platform, so please be sure to check periodically. Any material changes to the way we handle your Information will be brought to your attention on the Platform.

If you have any questions or concerns about this Policy, please do not hesitate to contact us.

This is a summary of some key information for Lenders on the Kasu protocol. It is important to read and understand this Important Information, as it summarises some of the important rights, responsibilities, and risks associated with lending using the Kasu protocol.

However, it is important to note that this Important Information is a summary only and does not contain all the risks and features associated with Lending through Kasu. In addition to reading and understanding this Important Information, prospective Lenders should also read and understand all of the content within the User Docs, along with their Loan Contract.

Risk Disclosure: Senior, Mezzanine and Junior Tranches

When lending through Kasu, it is essential to understand the different types of lending Tranches that may be made available—Senior, Mezzanine, and Junior—and the different risks associated with each Tranche. Each Tranche has a distinct risk profile and position in the capital structure, which affects the potential returns and the risk to Lenders’ capital.

1. Senior Tranche

The Senior Tranche is the highest-ranking Tranche. In the event of losses, Senior Tranche Lenders have the first claim on any recovered funds.

Key Risks:

• Lower Yield: Due to its highest ranking priority in the recovery of funds in the event of losses, the Senior Tranche typically offers lower interest rates compared to Mezzanine and Junior Tranches.

• Credit Risk: In the event of any end borrower defaults that result in losses, Senior Tranche Lenders are paid first from any recovered funds, but this still depends on the overall recovery rate. In the event that less than 100% is recovered, losses are proportionately applied across Lenders in the lowest ranking Tranche first (Junior Tranche), proceeding up the line through Mezzanine Tranche (if applicable) and finally to Senior Tranche. This proportionality is applied in line with the abovementioned ranking order, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to (i.e.any losses borne by the Lending Strategy are mutualised across Lenders starting from the lowest ranking Tranche). In the absence of Junior and Mezzanine Tranches, losses are proportionately applied across all Lenders in the single available Tranche.

2. Mezzanine Tranche

The Mezzanine Tranche sits between the Senior and Junior Tranches. It generally offers higher returns (interest rate) than the Senior Tranche but comes with increased risk.

Key Risks:

• Subordination Risk in Event of Losses: Mezzanine Lenders are subordinated to Senior Tranche Lenders in the event of losses. This means that in the event of losses, they are paid from recovered funds only after all Senior Tranche obligations have been met.

• Credit Risk: There is a higher risk of non-recovery (capital risk) compared to the Senior Tranche. In a default scenario that results in losses, Mezzanine Lenders may experience significant delays in the recovery of funds and an increased risk of capital loss (compared to Senior Tranche Lenders). In such an event, after Senior Tranche Lenders have recovered their funds in full, if there is not enough recovered to pay all Mezzanine Tranche Lenders in full, losses are proportionately mutualised across all Lenders in the Mezzanine Tranche, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to. Similarly, recoveries (if any), after Senior Tranche Lenders have been repaid in full, are proportionately applied across all Lenders in the Mezzanine Tranche, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to. Only after Senior Tranche and Mezzanine Tranche Lenders’ funds have been recovered in full are any remaining recoveries allocated to the Junior Tranche Lenders (see below).

3. Junior Tranche

The Junior Tranche is the lowest-ranking Tranche. It generally offers the highest potential returns (interest rate) but also bears the greatest risk.

Key Risks:

• Subordination Risk in Event of Losses: Junior Tranche Lenders are the last to recover funds in the event of losses. They only receive recovered funds after all obligations to Senior and Mezzanine Lenders have been fulfilled.

• Credit Risk: The risk of capital loss is highest in the Junior Tranche. In a loss scenario, Junior Tranche Lenders may experience significant delays in the recovery of funds and the greatest risk of capital loss (compared to Senior Tranche and Mezzanine Tranche Lenders). In such an event, after Senior Tranche Lenders and Mezzanine Tranche Lenders have recovered funds in full, if there is not enough recovered to pay all Junior Tranche Lenders in full, losses are proportionately mutualised across all Lenders in the Junior Tranche, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to. Similarly, recoveries (if any), after Senior Tranche Lenders and Mezzanine Tranche Lenders have been repaid in full, are proportionately applied across all Lenders in the Junior Tranche, regardless of which individual end borrower(s) a particular Lender’s funds are loaned to.

Acknowledgment of Risks

By lending in a particular Tranche, Lenders acknowledge and accept the inherent risks associated with their chosen position in terms of priority in the event of losses and recoveries. It is crucial for Lenders to thoroughly assess their risk tolerance, lending objectives, and financial situation before committing capital to any Tranche.

Automated Opt-In

The following applies to Lenders with aggregate value of existing loans and queued Lending Requests equal to or greater than 350,000 USDC.

Once a Lending Request is accepted, the Credit Originator has 30 days to identify an end borrower to which a Lender’s funds will be deployed. Once the Credit Originator identifies a suitable end borrower(s), the Lender is informed via email of the identity of the end borrower(s) to which their funds will be loaned.

The Lender is offered the following choices:

• Opt-out: the Lender has 48 hours to opt out from the lending, in which case, their funds will be returned; or,

• Instant Opt-in: the Lender may opt in immediately (prior to the end of the 48 hour period); or,

• Automated Opt-in: if the Lender provides no instruction within the 48 hour period, they are deemed to have automatically opted in (otherwise known as ‘negative consent’).

Lenders are able to select Opt-in or Opt-out requests via the ‘My Portfolio’ tab > Transactions, after connecting their Web3 wallet to the Kasu platform.

The above process repeats each time a Lender’s funds are deployed to another end borrower(s).

It is noted that should an end borrower not be identified within 30 days, the Credit Originator will return the funds to the Lender (subject to available liquidity).

It is each Lender's responsibility to ensure their email spam filters are adjusted to accept emails from the address: [email protected] Kasu accepts no responsibility for any emails that have been missed.

Acknowledgment of Automated Opt-In

By lending through Kasu, Lenders acknowledge and accept that if they do not select Opt-out within the 48 hour timeframe of being informed of the identity of the end borrower(s) to which their funds will be loaned, their funds will be automatically deployed. At that point, funds can only be returned via the normal Withdrawal Request process.

Exemption from End Borrower Disclosure and Opt-In Mechanism

Once the aggregate value of a Lender’s existing Loans and queued Lending Requests reaches a total equal to or greater than 350,000 USDC, all lending provided by a Lender will be subject to a contract designed for larger lenders. As such, amongst other things, Kasu will no longer undertake the following:

• Return funds to the Lender if an end borrower is not identified within 30 days of the Lending Request being accepted.

• Inform the Lender of the identity of any end borrower(s) to which their funds will be loaned.

Offer the Lender the opportunity Opt-in or Opt-out of their funds being deployed to any end borrower(s).

Fees Explanation and Gross APY Disclosure

Important Note:

All advertised APY rates are presented on a gross basis (before fees). This means that the actual APY received by Lenders will be net of the protocol fees outlined below.

Overview of Fees:

All fees taken by the Kasu protocol are derived from the interest generated by lending activities. A percentage of this interest is allocated to various components of the ecosystem to support its ongoing development and maintenance.

Fee Structure with Example Calculation:

• Protocol Fee Sharing: 5% of the total interest earned by Lenders is allocated towards Protocol Fee Sharing.

• Kasu Protocol Wallet: 5% of the total interest earned by Lenders is allocated to the Kasu Protocol wallet.

For example, if a Lending Strategy offers an advertised 20% APY to Lenders, the associated fees are as follows:

• 1% APY (5% of 20% APY) is allocated towards Protocol Fee Sharing.

• 1% APY (5% of 20% APY) goes to the Kasu Protocol wallet.

In this scenario, a Lender who participates in a Lending Strategy advertised with a 20% APY (gross) will receive 18% APY (net) after the deduction of fees.

Interest Accrual

Interest on loaned capital is accrued on a “per epoch” basis (an epoch being every 7 days) and added to each Lender's loan balance (commonly referred to as capitalised interest). Accessing accrued interest occurs through the same mechanisms as accessing the initial loaned capital, requiring Lenders to submit a withdrawal request.

Acknowledgment of Interest Accrual Process

By lending through Kasu, Lenders acknowledge and accept the interest accrual process. It is essential for Lenders to understand that interest is accrued on a per epoch basis and reflected in their loan balance (i.e. capitalised interest). Access to these funds requires a withdrawal request, which applies to both the initial loaned capital and the accrued interest, thereby reflective of a Lender’s total balance.

Pending Phase Before Interest Accrual

When Lenders submit a Lending Request to Kasu, their funds enter a Pending Phase (referred to as a queued Lending Request) until the next Clearing Period. The Clearing Period occurs at the end of an epoch, during which the outcome of Lending Requests and Loan Withdrawal Requests is determined.

Key Points:

• Pending Phase (queued Lending Requests): Funds do not start accruing interest immediately upon the submission of a Lending Request. They remain in a Pending Phase until the next Clearing Period, which occurs at the end of 7-day each epoch.

• Clearing Period: At the end of each 7-day epoch, during the Clearing Period, the outcome of Lending Requests and Loan Withdrawal Requests is determined. Based on factors such as each Lender's Loyalty Level and the liquidity needs of each Lending Strategy, Lending Request may be accepted, rejected or reallocated to the next available Tranche. Withdrawal Requests may be partially or fully accepted, or the entire Withdrawal Request may remain queued until the next epoch based on available liquidity.

• Start of Interest Accrual: If funds from a Lending Request are accepted during a Clearing Period (end of a 7-day epoch), the Lender will then start accruing interest from the beginning of the next epoch.

Acknowledgment of Pending Phase and Clearing Period Process

By lending through Kasu, Lenders acknowledge and accept the Pending Phase and Clearing Period process. It is crucial for Lenders to understand that their funds will only start accruing interest once their Lending Request is accepted at the end of the Clearing Period (which occurs at the end of each 7-day epoch). Lenders also acknowledge that in rare circumstances, a Clearing Period could be missed, resulting in their Lending Request being processed in a future epoch.

Loan Withdrawal Requests

When Lenders submit a Loan Withdrawal Request to Kasu, their request enters a Pending Phase (queued). Acceptance of these Loan Withdrawal Requests is determined during each Clearing Period (end of each 7-day epoch) and is contingent upon the excess liquidity within the specific Lending Strategy, and may therefore remain outstanding (or partially outstanding) for one or more epochs. Excess liquidity is based on various factors outside of Kasu and Credit Originators' control, such as (but not limited to) demand for Lending Strategies and End Borrowers meeting repayment requirements.

Key Points:

• Pending Phase and Excess Liquidity: Loan Withdrawal Requests remain in Pending Phase (queued) until they are accepted as part of each Clearing Period (end of each 7-day epoch), which is dependent on the excess funds available within the given Lending Strategy. This means that Lenders may only withdraw funds up to the excess liquidity available, potentially resulting in partially fulfilled (or even unfulfilled) Withdrawal Requests until the next Clearing Period.

• Multiple Epochs: Withdrawal Requests may therefore remain outstanding/queued (or partially outstanding/queued) for more than one epoch until sufficient liquidity is available, which will be determined during each Clearing Period (end of each 7-day epoch).

• Priority Based on Loyalty Level: Withdrawal Requests are prioritised according to each Lender's Loyalty Level, with higher Loyalty Levels receiving preference. Lenders with lower or no Loyalty Levels may experience longer waiting times for their Withdrawal Requests to be accepted.

Acknowledgment of Loan Withdrawal Request Process

By submitting a Loan Withdrawal Request through Kasu, Lenders acknowledge and accept the Pending Phase and the process based on excess liquidity. Lenders understand that:

• Access to their funds is contingent upon the availability of excess liquidity within the Lending Strategy, which is determined during each Clearing Period (end of each 7-day epoch). Excess liquidity is based on various factors outside of Kasu and Credit Originators' control, such as (but not limited to) demand for Lending Strategies and End Borrowers meeting repayment requirements.

• Withdrawal Requests are prioritised based on Loyalty Level, potentially resulting in longer waiting times for lower or no Loyalty Level Lenders.

• Withdrawal Requests may therefore remain outstanding (or partially outstanding) for more than one epoch until sufficient liquidity is available.

Tranche Allocation and Overflow in Case of Oversubscription

When Lenders submit a Lending Request for a specific Tranche through Kasu, it’s possible that the requested Tranche could be oversubscribed. In such cases, the following process is applied:

Automatic Reallocation:

• Oversubscription Handling: If a requested Tranche (e.g., Junior) is oversubscribed, the excess funds are automatically reallocated to the next higher-ranking Tranche available with capacity (e.g., Mezzanine or Senior).

• Continual Reallocation: This reallocation continues up the line until all available Tranches are filled.

• APY Impact: Next available Tranches will have a lower APY (interest return), but will be higher ranking in terms recovery of funds in the event of losses (see ‘Risk Disclosure: Senior, Mezzanine and Junior Tranches’ Section).

Impact of Loyalty Levels:

• Priority Allocation: Higher Loyalty Levels increase the likelihood of allocation to the desired Tranche but do not guarantee it.

An example is given by the following Lending Strategy with three Tranches:

In this scenario, the excess 50,000 USDC from the Junior Tranche will be reallocated to the Mezzanine Tranche. Once the Mezzanine Tranche is filled, the remaining 40,000 USDC will be reallocated to the Senior Tranche. This results in:

This scenario leaves 30,000 USDC of the initial requests unallocated, which will be returned to the Lenders who submitted those requests.

Acknowledgment of Tranche Allocation and Overflow Process

By lending through Kasu, Lenders acknowledge and accept the Tranche allocation and overflow process in case of oversubscription. Lenders understand that:

• Their Lending Requests may be reallocated to higher-ranking/lower-yielding Tranches if the requested Tranche is oversubscribed.

• The lower-yielding Tranche will have higher priority ranking in terms of recovery of funds in the event of losses (see ‘Risk Disclosure: Senior, Mezzanine and Junior Tranches’ Section above).

• Higher Loyalty Levels increase priority allocation to a desired Tranche, but do not guarantee it.

• Reallocation is automated. If Lenders are not satisfied with their participation in a lower-yielding Tranche, they may either ‘opt-out’ within 48 hours of being informed by Kasu of the end borrower(s) to which their funds will be loaned, or they must submit a Loan Withdrawal Request as outlined earlier. Note that the opt-out mechanism is only available for Lenders with less than a combined value of 350,000 USDC of existing lending and outstanding Lending Requests.

Fixed APY Loans - Withdrawal Restrictions & Other Conditions

Loans with a fixed APY are fixed for the loan term made available to, and selected by, Lenders. During the fixed term, Lenders are unable to submit Withdrawal Requests. However, Lenders can request their funds be fully returned upon the expiry of the fixed term period by providing notice prior to the four epochs leading up to the fixed loan expiry date. Should a lender not provide such notice, their loan will automatically convert to the prevailing variable APY, and Lenders will be subjected to the normal Withdrawal Request process.

Acknowledgment of Fixed APY Withdrawal Restrictions & Conditions

By lending through Kasu, Lenders acknowledge and accept the restrictions and other conditions associated with fixed APY loans. Lenders understand that:

• Fixed Loan Term and Fixed APY: the period which the APY is fixed for is the same period the loan term is fixed.

• No Withdrawal Requests: no Withdraw Requests can be made during the fixed term period.

• Notice Period for Return of Funds: Lenders can request their funds be fully returned upon the expiry of the fixed term period, without having to undergo the normal Withdrawal Request process and the associated queueing system; however Lenders must notify Kasu prior to the four epochs leading up to the fixed term expiry date by following the notification process outlined on the Kasu platform (see My Portfolio > Lending Portfolio tab on the Kasu platform after connecting a Web3 wallet).

A $KASU Token Locker who is also a Lender can avail of the following token utility and rewards, but only if they have achieved certain Loyalty Levels. The extent to which a Lender receives the below utility and rewards is dependent on their Loyalty Level, which is determined by the synthetic value of their rKASU balance relative to total current USDC lending (inclusive of queued Lending Requests). Loyalty benefits are fully detailed below.

Lending Strategy Priority Access and Withdrawal Priority

• Lending Strategy Priority Access: Lending Requests will be processed on an epoch basis but will be subject to available Lending Strategy capacity and demand from (and supply of) Lenders and End Borrowers. Therefore, Lenders who achieve a Loyalty Level by locking $KASU to achieve a minimum ratio of rKASU relative to their USDC lending (inclusive of queued Lending Requests), will receive priority access to Lending Strategies. This mechanism may also be used to grant exclusive access to particular loan Tranches within Lending Strategies.

• Withdrawal Priority: Withdrawal Requests from Kasu Lending Strategies will be processed on an epoch basis but will be subject to the current liquidity status of each Lending Strategy (excess funds, shortage of funds, End Borrower repayments, End Borrower demand, etc.). Therefore, Lenders who achieve a Loyalty Level by locking $KASU to achieve a minimum ratio of rKASU relative to their USDC lending (inclusive of queued Lending Requests), will receive withdrawal priority.

APY Bonus

• Token Lockers, who are also Lenders, can receive an ongoing APY bonus, paid in $KASU tokens, but only if they have achieved (and maintain) certain Loyalty Levels ().

• The amount of APY bonus is subject to change, depending on the need to attract more Lenders to Kasu.

Protocol Fee Sharing

• Lenders who are also $KASU Token Lockers are entitled to Protocol Fee Sharing, paid in USDC.

• The higher the Lender's Loyalty Level, the more share of Protocol Fees they are entitled to.

Longer locking periods provide Lenders with greater amounts of rKASU to achieve higher Loyalty Levels and associated utility and rewards. This is fully detailed in the Section.

By purchasing and locking $KASU tokens and ensuring the minimum rKASU-to-Lending Ratio, Lenders can amplify their returns whilst aligning their interests with the long-term success of the Kasu protocol. This creates a mutually beneficial relationship between Lenders and the Kasu ecosystem, facilitating more lending growth and contributing to the overall health and democratisation of global private credit markets. However, Lenders must maintain awareness of the risks associated with purchasing and locking the $KASU token, where like any cryptocurrency, it is subject to cryptocurrency market price volatility.

Losses and defaults are key risks associated with any type of lending. To account for this reality, Kasu has a structured approach to handling such situations. Understanding this process helps Lenders better understand the potential risks and protections in place in the event of losses and default.

An Unrealised Loss event occurs when an End Borrower fails to meet its contractual repayment obligation and is therefore deemed to be in 'default.' When an Unrealised Loss event occurs, it is first reported to the Kasu system. After reporting occurs, losses are applied in a specific order:

1. First Loss Capital (if applicable)

2. Junior Tranche

3. Mezzanine Tranche

4. Senior Tranche

Unrealised Losses therefore reflect a situation where the Credit Originator has deemed there to be an expected loss which has not yet materialised.

All Lenders who are impacted by the Unrealised Loss event receive non-transferable ERC-1155 Unrealised Loss tokens. These tokens represent the Lender's share of the Unrealised Loss and their potential claim on any recovered funds.

Naturally, an Unrealised Loss lowers the affected parties' lending balance. This adjustment is reflected in the number of Unrealised Loss tokens issued.

The Credit Originator then initiates recovery actions on non-performing loans, and if any funds are recovered, they are distributed proportionately to Unrealised Loss token holders. After recovery efforts are exhausted, any outstanding unrecovered amount becomes a Realised Loss.

It's important to note that Unrealised Losses don't necessarily mean permanent losses. They represent a temporary impairment that may potentially be partially or fully recovered through the Credit Originator's off-chain recovery efforts. This includes exercising a Credit Originator’s security position over End Borrower’s and formal legal proceedings (if applicable).

For Lenders, this system offers several advantages:

• Transparent process for handling potential and actual losses

• Fair distribution of any recovered funds

• Potential for partial or full recovery of losses

While Kasu's structure and processes, along with Credit Originators' credit risk structuring aim to mitigate these risks where possible, it's crucial to understand that lending always carries risk.

Understanding how Kasu and Credit Originators handle losses can help you make more informed decisions about your approach to lending and potential returns relative to your personal risk tolerance and other personal circumstances. Please refer to the 'Risk Disclosure: Senior, Mezzanine and Junior Tranches' in the , along with the , for detailed risk explanations.

1. Terms of Use

Acceptance of the Terms of Use: By accessing and using our platform, you agree to be bound by these Terms of Use.

Changes to the Terms of Use: We may update these Terms of Use from time to time. We will notify you of any significant changes via notices on our platform, which you should check regularly. Your continued use of the platform after any changes indicates your acceptance of the new terms. Users that are not accepting of the new terms should promptly cease using the platform and withdraw their funds as soon as practicable.

Electronic Communication: You consent to receiving electronic communications from us. This includes emails, notifications, and other electronic messages.

Accessing the Interface and User Security: The platform is accessed by users connecting their decentralised (web3) wallet to the platform. Whilst each user’s web3 wallet security is beyond our control or influence, we encourage users to ensure they use care in the security of their electronic devices and web3 wallets:

• Account Security: You are responsible for maintaining the security of your web3 wallets. You should not share with anyone the ability to access your web3 wallets.

• Password Strength: You should use strong and unique passwords on your web3 wallets and electronic devices and avoid sharing them with others. We are not responsible for any losses suffered by you as a result of poor or inadequate password management.

• Two-Factor Authentication: We encourage you to enable two-factor authentication wherever and whenever possible for enhanced security.

Prohibited Uses: You may not use our platform for any illegal or unauthorized purpose. This includes, but is not limited to:

• Fraudulent activities

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Monitoring and Enforcement; Termination: We may monitor your use of the platform and take action against any violations of these Terms of Use or applicable law. We reserve the right to remove or restrict your access to the platform without notice.

Compliance: You are responsible for complying with all applicable laws and regulations, including but not limited to:

• Anti-money laundering (AML) regulations

• Know Your Customer (KYC) requirements

• Tax laws

Links from the Interface: We may provide links to third-party websites. We are not responsible for the content or security of these websites.

2. User Rights and Responsibilities

Intellectual Property Rights: All content on our platform, including trademarks, logos, and software, is owned by us or our licensors and protected by law. You may not use our intellectual property without our prior written consent which may be withheld entirely at our discretion.

Reliance on Information Posted; No Professional Advice: The information on our platform is provided for informational purposes only and should not be considered financial advice. You should consult as appropriate with financial, legal and taxation advisors before making any investment decisions.

Indemnification: You agree to indemnify and hold us harmless from any claims, damages, losses, liabilities, costs, and expenses arising from your use of the platform.

3. Legal and Dispute Resolution

Warranty Disclaimer: We make no warranties or representations about the accuracy or completeness of the information on our platform. The platform is provided "as is" without any warranties. Users access the platform entirely at their own risk.

Limitation of Liability: To the fullest extent permitted by law, we shall not be liable for any damages or losses arising from your use of the platform, including but not limited to, direct, indirect, incidental, consequential, or punitive damages. This includes, but is not limited to, loss of profits, loss of data, loss of business opportunity, or any other intangible loss.

Nature of Blockchain; Assumption of Risk; Waiver of Claims: Lending through the platform involves risks. You should carefully consider the risks before using the platform. By using our platform, you agree to assume these risks, including but not limited to:

• Market Risk: The risk of fluctuations in the value of cryptocurrencies or other assets.

• Credit Risk: The risk of default by borrowers, both default by the specific borrowers to whom you are providing finance and the risk of default by the borrowers that are in each Lending Strategy.

• Operational Risk: The risk of system failures, technical difficulties, or human error.

• Smart Contract Risk:

No Fiduciary Duties: We do not owe you a fiduciary duty. You are solely responsible for your financial decisions.

Governing Law and Jurisdiction: These Terms of Use shall be governed by and construed in accordance with the laws of South Australia and the courts that take appeals therefrom.

Dispute Resolution: Any dispute, controversy, or claim arising out of or relating to your use of, or engaging with, the platform shall be finally settled by arbitration administered by the Australian Centre for International Commercial Arbitration (ACICA) in accordance with the 2 ACICA Rules and per the following:

• The seat of arbitration shall be Sydney, Australia.

• The language of the arbitration shall be English.

• The number of arbitrators shall be one.

• The arbitral tribunal shall have the power to order interim measures.

Class Action and Jury Trial Waiver: You agree to waive your rights to a jury trial and to participate in class action lawsuits.

Injunctive Relief Waiver: You agree to waive your right to injunctive relief.

Waiver and Severability: If any provision of these Terms of Use is found to be invalid, the remaining provisions shall remain in effect.

Entire Agreement: These Terms of Use constitute the entire agreement between you and us.

Indemnification You agree to defend, indemnify, and hold harmless the Company, its affiliates, licensors, agents, and service providers, and its respective officers, directors, employees, contractors, agents, licensors, suppliers, successors, and assigns from and against any claims (including claims by any government agency or body), liabilities, damages, judgments, awards, losses, costs, expenses, or fees (including reasonable attorneys’ fees) arising out of or relating to: (1) your violation of these Terms of Use; (2) your use of the Platform, including, but not limited to, your interactions with the Platform, use of or reliance on the Platform’s content, services, and products other than as expressly authorised in these Terms of Use; (3) your use or reliance on of any information obtained from the Platform; or (4) any other party’s access and use of the Platform or Protocol with your assistance or by using any device or account that you own or control.

4. Specific Terms for Participants

Provisions Specific to Certain Types of Participants Certain provisions may apply to specific types of users, such as lenders and borrowers.

Pool specific Terms & Conditions Specific terms and conditions may apply to certain pools or investments.

Force Majeure We may be excused from performance of our obligations under these Terms of Use in the event of a force majeure event, including but not limited to events such as a natural disaster, pandemic, or significant disruption to the blockchain network.