The Problem Kerne Solves

There are three problems in DeFi that Kerne was built to address. Each one represents a massive pool of underutilized capital.

Problem 1: Idle stablecoins

USDC and USDT are widely held stablecoins. Their issuers receive income on the reserves.

Stablecoin holders bear issuer, custody, regulatory and blacklist risks. Reserve income goes to the issuer.

Problem 2: Underused liquid staking tokens

Ethereum's shift to proof of stake created a new asset class: liquid staking tokens (LSTs). Lido's stETH, EtherFi's weETH, and similar tokens allow ETH holders to earn staking rewards while maintaining a liquid, transferable token.

Liquid staking tokens can be used as collateral in a delta neutral strategy. Funding payments can add to or subtract from staking rewards, while hedging introduces costs and venue risks.

Problem 3: Institutional Strategies Locked Behind Closed Doors

Delta neutral perpetual futures strategies have been used by quantitative hedge funds for years. They earn funding carry without directional price exposure, and that carry turns negative when funding inverts. Until recently, these strategies were available only to institutions with exchange relationships, significant capital, and the technical infrastructure to manage positions continuously. Kerne brings this delta neutral yield infrastructure on chain, accessible to anyone with a wallet and a supported asset.