How Does Kasu Work?
Kasu is an RWA private credit protocol on Base that lets DeFi lenders earn 15-25% APY by funding real-world business loans. You deposit USDC, which is converted to fiat and lent to businesses (primarily accounting firms and their clients) in the US, Canada, Australia, and UK through vetted Credit Originators. Kasu integrates Apxium's fintech technology to optimize borrower cash flows and improve credit risk. Deal quality is validated by institutional asset managers. The protocol launched in February 2025 and claims its end borrowers operate in industries uncorrelated to crypto markets. A KASU token is planned but not yet launched.
TVL
$9M
Sector
RWA
Risk Grade
C+
Value Grade
C-
Core Mechanisms
6.1.2
NovelOn-chain lender deposits funding off-chain business loans via Credit Originators
DeFi lenders deploy USDC which is converted to fiat and lent to real-world businesses through Credit Originators. Hybrid DeFi/TradFi model. Off-chain lending with on-chain capital sourcing.
6.2.4
Fixed APY lending strategies (15-25%) across risk-tiered pools
Credit Originators offer lending strategies with different risk-return profiles. Lenders choose strategies based on APY and risk tolerance. Rates set by Credit Originators, not by algorithm.
2.3.2
NovelCredit Originator-managed lending with Apxium cash flow optimization
Apxium proprietary technology optimizes borrower cash flows before lending, improving credit risk. Technology manages $2.5B+ in invoices annually. Novel integration of SaaS fintech with DeFi lending.
6.1.4
Isolated lending strategy pools per Credit Originator
Each Credit Originator manages isolated lending strategies. Lender capital compartmentalized per strategy. No cross-contamination between different Credit Originator pools.
7.4.1
KASU token locking for enhanced lending utility and rewards
Future KASU token will provide utility and reward enhancements for lenders who lock tokens. Token generation event pending. No requirement to hold KASU to participate as lender.
5.4.1
Institutional asset manager validation of deal quality
Deal quality validated by institutional asset managers before loans are offered to DeFi lenders. Adds institutional oversight layer to credit assessment.
How the Pieces Interact
Once USDC is converted to fiat and deployed off-chain, lenders lose real-time visibility into loan performance. Trust shifts from smart contract guarantees to Credit Originator reporting integrity.
Credit Originators manage fiat funds off-chain. If a Credit Originator becomes insolvent, mismanages funds, or commits fraud, lender recovery depends on off-chain legal processes, not smart contract enforcement.
15-25% APY on business lending to Tier 1 economy businesses is unusually high. Either default risk is higher than presented, or the yield advantage is temporary and unsustainable at scale.
Cash flow optimization technology is presented as credit risk reducer, but optimizing invoice collection speed does not eliminate underlying business risk. Over-reliance on technology may create false sense of security.
What Could Go Wrong
- Off-chain lending to real-world businesses creates credit risk that cannot be enforced or monitored purely through smart contracts
- USDC converted to fiat for off-chain lending introduces counterparty risk with Credit Originators who manage funds outside DeFi transparency
- Very new protocol (live Feb 2025) with limited track record — 15-25% APY claims on business lending require careful scrutiny
Credit Originator Default or Fraud
ModerateTrigger: A Credit Originator managing significant lender capital fails, becomes insolvent, or is found to have mismanaged funds
- 1.Credit Originator faces financial difficulties or operational failure — Loan origination and repayment collection disrupted for their lending strategies
- 2.Lenders in affected strategies stop receiving yield payments — Lender panic; withdrawal requests spike across all strategies
- 3.Other Credit Originators face withdrawal pressure from contagion — Liquidity across Kasu protocol drops; new lending activity halts
- 4.Legal proceedings to recover off-chain funds begin — Extended timeline for fund recovery; lenders face partial or total losses
Risk Profile at a Glance
Overall: C+ (39/100)
Lower score = safer