Why Kaskad
The Problem
DeFi lending protocols today face a recurring set of structural issues:
Governance capture. Token-weighted voting allows whales or attackers to push through proposals that drain treasuries, disable liquidation parameters, or redirect emissions — often in a single block via flash loans.
Mercenary capital. Most incentive models reward users who deposit right before a snapshot and withdraw immediately after. This creates TVL spikes with no lasting liquidity, draining emission budgets without building a sustainable protocol.
Single-chain dependency. Protocols locked to a single ecosystem miss liquidity from other chains and are entirely exposed to that ecosystem's growth trajectory.
Opaque treasury management. Many DAOs operate with discretionary treasury spending, vague reporting, and no hard limits on outflows — leading to mismanagement and loss of community trust.
What Kaskad Does Differently
Bounded Governance
Every adjustable parameter in Kaskad operates within a hard-coded range set at deployment. Governance participants can tune values — increase or decrease LTV ratios, adjust emission splits, calibrate risk thresholds — but they can never push any parameter below its safety floor.
Liquidations cannot be disabled. Over-collateralization requirements cannot be removed. The treasury split cannot be changed. These invariants are enforced at the contract level, not by social consensus.
Activity-Based Incentives
Kaskad distributes rewards based on sustained, genuine protocol usage over monthly epochs — not based on snapshots or deposit timing. Both suppliers and borrowers must meet minimum thresholds for deposit size, loan-to-value ratio, and uptime to qualify for incentives.
Borrower rewards are weighted by the utilization of the assets they borrow, ensuring that only productive borrowing is incentivized.
PoW-Secured Settlement
Kaskad settles on Kaspa — a proof-of-work blockDAG running at 10 blocks per second, using the GHOSTDAG protocol (a generalization of Nakamoto consensus). This offers a fundamentally different security model from PoS chains: no staking concentration risk, no slashing-based validator economics, and full Nakamoto-level decentralization.
No other PoW chain currently supports serious DeFi infrastructure at this throughput.
Cross-Chain from Day One
Through a signed integration with Hyperlane, Kaskad supports asset bridging across 100+ networks at mainnet launch. Users can supply stablecoins, ETH, yield-bearing assets, and other tokens from Ethereum, Arbitrum, Base, Optimism, and many other chains — without needing to navigate complex bridging flows.
This means Kaskad's addressable market is not limited to the Kaspa ecosystem. Any DeFi user on any supported chain can access Kaskad's lending markets.
Immutable Dual Treasury
All protocol fees are automatically split at the contract level: 65% to the DAO Treasury (governed by active participants) and 35% to the Operational Treasury (infrastructure, audits, maintenance). This split is immutable — it cannot be changed by governance or by the team.
There is no third destination. No discretionary fund. Every fee is routed deterministically and auditable on-chain.
MiCA-Aligned Compliance
Kaskad is structured under POW Incentives S.A. (BVI) with a compliance framework aligned to the EU's Markets in Crypto-Assets (MiCA) regulation. The $KSKD token is classified as a utility/governance token with no revenue rights, profit distribution, or equity claims — making it defensible under current and anticipated regulatory frameworks.