Treasury

Kaskad operates a dual treasury system with an immutable split ratio enforced at the contract level. All protocol fees are automatically routed — there is no manual control, no discretionary allocation, and no third destination.

The 65/35 Split

Every fee collected by the protocol is split at the moment of collection:

65% → DAO Treasury
35% → Operational Treasury

This ratio is hard-coded at deployment and cannot be changed — not by governance, not by the team, not by any multisig. It is an immutable contract parameter.

Fee Sources

The protocol generates fees from three sources:

Lending spread — a portion of the interest paid by borrowers is retained by the protocol (the remainder goes to suppliers as yield).

Flash-loan fees — 0.05% of the borrowed amount on each flash loan execution.

Liquidation penalty fees — after the liquidator receives their bonus, the remaining portion of the liquidation penalty is routed to the protocol.

All fees are collected on-chain and split automatically.

DAO Treasury (65%)

The DAO Treasury is the protocol's primary resource pool, governed by active Kaskad participants through bounded governance.

Funded by: 65% of all protocol fees, undistributed emissions, milestone allocations.

Used for:

Activity incentive distributions
Milestone rewards
Unused emission recycling
Ecosystem development grants
Kaspa Core funding (minimum 5%, adjustable up to 7.5%)
Supply adjustment operations

Governance controls:

All outflows require governance proposals that pass quorum (60%) and respect bounded parameters
Maximum outflow per epoch: 85% of treasury balance
Streaming allocations (linear release over time, revocable by vote)
Supermajority required for major allocation changes

What the DAO Treasury is NOT:

Not a profit-distribution mechanism
Not a revenue-sharing pool
Token holders do not have a claim on DAO Treasury funds by virtue of holding $KSKD

Operational Treasury (35%)

The Operational Treasury funds the protocol's infrastructure and maintenance needs. It is managed by core contributors under a predefined operational mandate.

Funded by: 35% of all protocol fees.

Used for:

Security audits and formal verification
Infrastructure costs (nodes, RPC, monitoring)
Oracle operations and maintenance
Third-party integrations
Bug bounties
Operational expenses

Controls:

Managed under a multi-sig (3-of-6) arrangement
Quarterly expenditure reports published on-chain
Predefined operational mandate — spending categories are fixed
Cannot access DAO Treasury funds
Cannot access user deposits

Treasury Invariants

The following properties are enforced at the contract level and cannot be changed:

The 65/35 split is immutable — no governance proposal or team action can modify it
No third destination exists — fees can only flow to DAO Treasury or Operational Treasury
User deposits are never accessible — neither treasury has any mechanism to touch supplied or borrowed funds
All flows are auditable — every token movement is recorded on-chain with full transparency