Kasu Finance

Introduction to Kasu

• Kasu is a Real-World Assets (RWA) business lending protocol that delivers higher-quality yields to DeFi lenders.
• The protocol achieves these yields by utilizing proprietary technology to optimize businesses’ cash flows to improve credit risk. This technology ensures superior risk management to deliver the highest risk-adjusted returns in RWA private credit.
• Kasu brings together everyday DeFi lenders, with creditworthy ‘real world’ business borrowers, all curated by industry-leading loan originators (Delegates) that demonstrate best-in-class risk management and are exclusive to Kasu.
• Through its launch partner Delegate, Apxium, Kasu is able to deliver consistent 12-25% yields from highly creditworthy accounting firms and their clients. This is proven by Apxium’s pristine credit history with zero losses over its 8-year history of lending to this segment.
• Kasu is therefore pioneering financial democratisation with access to the highest quality private credit opportunities. Subject to KYC/AML regulations, anyone in the world (including those in the U.S.) can lend USDC via Kasu to access the most risk-optimized yields in all of RWA private credit.

Proprietary Technology and Value Proposition

Kasu is designed to provide a superior experience to DeFi lenders over any other RWA private credit protocol. This is delivered through a focus on four key value propositions that competitors aren’t able to replicate in either TradFI or RWA: 

1. Deep value-add beyond lending: Kasu’s Receivables Financing Lending Strategies provide borrowers with Accounts Receivables Automation software and Smart Payments technology that reduces their debtor days by up to 50%. Therefore, whilst Kasu solves the late debtor collection problem before lending funds, other RWA protocols simply throw money at the late debtor collection problem, exposing lenders to more risk than necessary.
2. Risk management: By speeding up borrowers’ receivables collections, they unlock more cash flow, thereby lowering their credit risk to make it safer for lenders.
3. Highest risk-adjusted returns to lenders: lower credit risk relative to yields means Kasu delivers the highest risk-adjusted yields in all of RWA private credit.  
4. Transparency: Data integration with borrowers’ accounting systems means Kasu will display risk reporting dashboards to lenders that are of a higher quality standard than banks’ covenant risk reporting systems.

Protocol and Infrastructure

Kasu currently offers three Lending Strategies. Each has a tranched system to offer a range of returns depending on lenders’ risk appetites, similar to traditional finance. The platform interacts with multiple entities:

1. Lenders – Individuals and institutions lend USDC.
2. Offramping Infrastructure – Converts USDC into fiat currency to conduct lending to accounting firms and their clients in the U.S., Canada, and Australia. 
3. Business Borrowers – Kasu’s exclusive partner Delegate, Apxium, currently manages over $2.5 billion in annual invoicing for some of the largest accounting firms in the world and their clients across North America, the U.K., and Australia.
4. Delegates – Kasu’s exclusive partnership with Apxium means that the platform will eventually onboard more Delegates, that can avail of the Accounts Receivable (AR) automation software and global payment rails to also deliver superior value propositions and risk optimizations across a broader range of borrowers. 
5. $KASU Token Utility & Rewards – An optional feature offering incentives and additional benefits to lenders, such as priority access to Lending Strategies, priority withdrawal of funds, APY bonus, and protocol fee sharing. 

The architecture effectively connects lenders with the highest quality ‘real-world’ borrowers, with all loans currently originated by Delegate partner, Apxium, with best-in-class risk management technology. This architecture ensures Kasu can deliver the highest risk-adjusted returns to lenders.

Why Kasu?

While there are other RWA-based yield earning opportunities in DeFi, such as those offered by Maple, Goldfinch, and Centrifuge, Kasu differentiates its offering as follows:

• Regulatory compliance enables participation from all lenders worldwide, including the U.S. (subject to KYC/AML regulations). Kasu’s financial democratisation ethos, therefore, does not discriminate based on minimum wealth requirements or lending amounts. 
• Private credit exposure to some of the highest creditworthy borrowers, including top 100 accounting firms in the U.S, Canada, and Australia, underwritten by quality underlying assets (i.e., accounting firm invoices). 
• Proprietary technology that automates over $2.5B of annual invoicing and accounts receivable workflows for accounting firms, reducing their debtor days by up to 50%, fixing the late debtor collection problem before lending funds. This core IP enables Kasu to deliver the highest risk-adjusted returns to lenders. These accounting firms’ relationships provide a scalable network effect to access funding opportunities associated with their high-quality client bases. 
• Kasu’s partner Delegate, Apxium, has a pristine credit history with a zero loss track record over its entire 8 years of lending. 
• Higher yields (12-25%) compared to the market average (7-12%)
• Simpler user experience for non-crypto natives.

Market Opportunity in RWA

Since the beginning of 2021, the global onchain market for real-world assets has grown from $150 million to $19.2 billion, showing a >128x increase in tokenized assets. This meteoric rise is largely driven by the institutional adoption of blockchain technology to create transparent and efficient systems to bring assets on-chain. Financial Managers like Blackrock and Franklin Templeton have used tokenization to bring commodities and US treasuries onchain.

Growth Projections

The RWA and accounts receivables markets are expected to grow significantly in the coming years. There is a huge opportunity in Kasu’s current target market and future markets that Kasu will expand to in the coming years.

• RWA tokenization market is expected to reach $5 trillion by 2030 (source: Citi Group)
• The accounting receivables market is expected to grow to $30 billion by 2030 at a CAGR of 14% (source: Verified Market Research)

Kasu is well-positioned to capture a significant market share in the RWA space:

1. Short-term Catalysts (12-24 months)
   1. ‘Land & Expand’ strategy through an existing client base of accounting and law firms with a collective annual turnover of $2.5 billion, presenting an immediate funding opportunity of up to $300 million
   2. Leverage these existing accounting and law firm relationships to access their client bases, presenting an additional funding opportunity of up to $7.5B
   3. Further monetize the above ‘distribution moat’ to launch additional yield-generating products
   4. Replicate the above via geographic expansion and market penetration
2. Long-term Opportunities (2-5 years)
   1. Potential to become the dominant platform for private credit in the accounting and legal sectors
   2. Expansion into adjacent professional services receivables
   3. Development of a secondary market for tokenized receivables

Kasu’s Revenue Opportunity

Forecast loan origination volume is based on an ultra-conservative penetration rate of Apxium’s existing accounting firm customers who already use its AR Software (SaaS) and Payments technology to automate their accounts receivable workflows but are not borrowers. Kasu’s launch partner Delegate, Apxium, currently manages over $2.5 billion in annual invoices through this technology, presenting an untapped loan origination growth opportunity to existing accounting firm customers of up to $300 million, without having to acquire a single new customer. Even with minimal lending ‘cross-sell’ penetration of these existing customers, Kasu has tremendous revenue opportunities. With a fee-sharing mechanism, part of these revenues will go toward the token holders who are also lenders.

Marketing and Demand Generation

RWA platforms have typically struggled to bootstrap supply from lenders to finance RWA credit. Kasu has cracked this through its successful negotiations with multiple credit funds seeking exposure to the high credit quality of Apxium’s loan book. This includes a major credit fund that is back-levered by Goldman Sachs and Citi Group, which has presented a Term Sheet offering up to $250 million. This is a significant achievement for Kasu, as this level of support from a traditional finance behemoth validates the world-class credit quality offered by Kasu Lending Strategies. This level of credibility has just opened the floodgates for institutional participation in Kasu. This is a huge unlock for Kasu and propels them into a leading RWA project even before hitting scale. 

Kasu has partnered with Apxium, a global SaaS+FinTech business with proprietary Accounts Receivable Automation software and Smart Payments technology that delivers the most intelligent working capital financing solutions for businesses. Apxium boasts a pristine credit history of zero losses over its entire 8-year lending history.

Strong institutional interest to lend to Kasu, coupled with a partner with a spotless underwriting record, is the perfect recipe to scale Kasu to one of the largest RWA projects in Web3.

In addition, Kasu has a comprehensive multichannel marketing and communications campaign driven by several leading DeFi KOLs and guerilla marketing. 

Team

Kasu boasts a team of veterans with proven success across both DeFI and TradFi projects. This includes experience in structured finance and securitization, legal and compliance in digital asset funds, M&A, corporate finance, banking, accounting, and fintech, as well as having launched and operated Web3 projects. 

Token Economics and Utility

Kasu is powered by the $KASU token. While lenders aren’t required to purchase the native Kasu token ($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 generate temporary, non-redeemable, and non-transferrable rKASU tokens that will accumulate, so long as $KASU remains locked. The value of a lender’s rKASU, relative to their total USDC lending, determines their Loyalty Level and associated utility and rewards. This ratio-driven approach means anyone can participate in the Kasu loyalty program, which is designed in a manner that promotes Kasu’s commitment to inclusiveness. I.e., any lender can avail of the same utility and relative rewards, regardless of their wealth. 

This includes priority access, capital withdrawal to and from Lending Strategies, APY bonuses, and Protocol Fee Sharing. 

Please note that $KASU is NOT live yet; don’t interact with fraudulent tokens. More details about the token can be found in Kasu’s docs.

2025 Roadmap

The Kasu platform is already live with more than $3 million in total value locked (TVL). Currently, the platform offers 3 lending strategies: Whole Ledger Funding for professional services firms, Professional Fee Funding for accounting firms, and Taxation Funding for diversified businesses. The yields range from 12% to 25% on USDC lending.  

The target for Q2 is $20 million in TVL, which is expected to reach $150 million by the end of 2025. 

Conclusion

The world is being tokenized, and all assets are being added to the blockchain. We see RWAs as one of the largest sectors in the crypto space going forward. Private credit is just one aspect of it; tokenized stock, bonds, commodities, real estate, and others will scale the onchain TVL by a factor of 100x+ in the coming 5-10 years. The future of assets is onchain, and Kasu is making this a reality.

Disclaimer and Risk Warning

Every financial product, asset class, or investment has a risk. A digital asset (also known as digital tokens, digital coins, or crypto(s)) is no different. That is why it is important for readers to be aware of the potential risks present in digital assets and blockchain projects. You should not invest funds in the digital assets market that you are not prepared to completely lose; i.e., only allocate risk capital to digital tokens. Woodstock Funds may or may not hold investments in projects we talk about in our newsletters or blog posts. The newsletters and blog posts are for information purposes only, and should not be considered any form of investment, financial, or legal advice. Furthermore, we will not accept liability for any loss or damage that may arise directly or indirectly from any content covered in our newsletters and blog posts.