Prove it yourself. Every block.
Absolute block by block transparency for institutional capital. Proof of reserves and protocol health metrics integrated in real time.
0%
Performance Fee • During Genesis Phase
Early adopter incentive
All yield retained by depositors
3
Chains Supported:
Base • Arbitrum • Optimism
4h
Attestation Cycle
Continuous reserve verification
/Two Yield Sources. Zero Directional Risk
Ethereum Staking Rewards
Deposited collateral continues earning Ethereum proof-of-stake consensus rewards. This yield is highly reliable and flows directly from Ethereum's economic model to kUSD holders.
Perpetual Funding Rates
A matching short perpetual futures position collects funding rate payments from leveraged long traders. This captures the structural long bias in crypto markets to provide a consistent, additive yield stream.
Deposit → Yield Flow
Deposit
User deposits ETH or supported LST/LRT assets
Convert
Assets are converted to optimal LST/LRT mix
Hedge
Matching short perp position opened automatically
Dual Yield
Staking rewards + funding rates accrue continuously
kUSD Issued
Yield-bearing synthetic dollar minted to your wallet
/Proof of Reserves
kUSD is fully backed. Always
Every kUSD is backed by equal or greater collateral value, verified on-chain every 4 hours
Every Four Hours
The Sentinel system runs automated solvency checks every 4 hours. Each check verifies total collateral value against outstanding kUSD supply and publishes a signed attestation on-chain.
What We Verify
- Total vault collateral vs. kUSD supply
- Hedge position health and margin levels
- Insurance fund balance adequacy
- Oracle price feed accuracy
Onchain Proof
Every attestation is a signed transaction on Base. Anyone can read the attestation contract to verify the current backing ratio, collateral breakdown, and hedge position status.
Insurance Fund
A dedicated insurance fund absorbs temporary losses from negative funding rates or market dislocations. The fund is capitalized from protocol revenue and serves as first-loss capital to protect depositors.
/Deployed and Verifiable on Base
Kerne Vault
View on BaseScanERC-4626 vault — accepts LSTs/LRTs, manages delta neutral positions
0x8005bc7A86AD904C20fd62788ABED7546c1cF2ACkUSD Token
View on BaseScanYield-bearing synthetic dollar — accrues value from dual yield streams
0x257579db2702BAeeBFAC5c19d354f2FF39831299KERNE Token
View on BaseScanProtocol governance token — staking, voting, and revenue share
0xfEA3D217F5f2304C8551dc9F5B5169F2c2d87340/Honest about risks. Rigorous about mitigations
Negative Funding Rates
Perpetual futures funding rates can turn negative during bear markets. When this happens, the short position pays instead of earns, temporarily reducing or eliminating the funding rate yield stream.
Mitigation
- Insurance fund absorbs losses during negative periods
- Kerne Neural Engine (KNE) forecasts and reacts to funding shifts
- Automated circuit breakers reduce hedge exposure during sustained negative funding
- Ethereum staking yield continues regardless, providing a baseline return
Smart Contract Vulnerability
Despite audits and testing, smart contracts may contain undiscovered vulnerabilities that could be exploited. This is an inherent risk in all DeFi protocols.
Mitigation
- Pending independent security audits by external firms
- Active bug bounty program with tiered rewards
- Circuit breakers pause automatically on anomaly detection
- Upgradeable proxy with timelock governance
Exchange Counterparty Risk
Hedging positions are opened on centralized exchanges. An exchange failure (insolvency, hack, or withdrawal freeze) could impact the protocol's ability to manage hedge positions.
Mitigation
- Positions spread across 3+ exchanges (Binance, Bybit, Hyperliquid)
- No single venue holds more than 40% of hedge exposure
- Institutional MPC custody assets segregated from exchange balance sheets
- Continuous venue health monitoring with automatic migration triggers