Katana

Katana is an Ethereum Layer 2 built for decentralised finance. It is structured around a small set of core building blocks rather than a broad app layer, with liquidity concentrated in key services such as spot trading and lending. On the network, Sushi serves as the main spot DEX and Morpho as the main lending and borrowing venue, while assets such as AUSD, Vault Bridge assets, Universal-imported assets and LBTC feed into that wider DeFi system.

The project is designed to keep capital active after it is bridged in. Through Vault Bridge, selected assets are placed into yield-bearing wrappers before appearing on Katana, so bridged capital can continue generating yield instead of sitting idle on the network. Katana also routes revenue from sources such as bridged asset yield, sequencer fees and parts of core application fees back into liquidity and pool incentives, creating a model where network activity supports trading depth and lending capacity.

From a technical perspective, Katana runs on Agglayer’s CDK OP Stack, uses Geth-based execution and relies on zk-proofs for settlement. It is connected to Ethereum and other Layer 2 networks through Agglayer’s Unified Bridge, which positions it as a DeFi-focused execution environment with native cross-chain connectivity.

KAT is the base ERC-20 token in the Katana ecosystem. By itself it is transferable, but it does not carry voting power. Its main function is to act as the asset users lock or deposit in order to take part in the network’s emission and reward system.

When KAT is locked, it becomes vKAT, a non-transferable position that gives the holder voting power. That voting power is used to direct KAT emissions towards specific liquidity pools and applications through gauge voting. Users who vote with vKAT can also receive rewards linked to that participation, including voting incentives and a share of fees from the markets they support, and they can choose how rewards are received.

KAT can also be deposited into avKAT, a transferable ERC-4626 vault token. This route is aimed at users who want exposure to the staking and voting system without managing the process directly. The vault holds a master vKAT position, while its strategy handles delegation, reward claiming and compounding. Because avKAT is liquid, it can be transferred, traded or used in DeFi, which gives KAT a second utility path beyond direct locking and manual voting.