Kelp: Introducing KUSD and a Unique Commerce-Backed Stablecoin Model

Key Insights

• Kelp has grown into one of the leading restaking ecosystems, with $1.25 billion in TVL and $3.0 million in annualized revenue as of March 20, 2026.
• Stablecoins and RWAs have scaled, but no onchain credit layer serves short-duration financing markets: global trade receivables ($25+ trillion annually) and cross-border payment settlement ($200+ trillion annually).
• Trillions remain locked in prefunded settlement buffers, not due to capital scarcity, but because credit cannot be accessed precisely when liquidity is needed.
• Existing DeFi lending protocols are built for speculative overcollateralization — structurally misaligned with the short-tenor, self-liquidating cycles of trade finance and FX settlement.
• Kelp launched KUSD: a yield-bearing stablecoin backed by verified trade receivables and real-world payment flows, generating over 10% yield from borrower repayments rather than token incentives.

Introduction

Kelp has established itself as a core player in the expanding restaking and yield ecosystem. As restaking matures from an experimental concept to a foundational DeFi primitive, Kelp is building the infrastructure to secure networks, enhance capital efficiency, and amplify yield opportunities across chains.

Through its flagship products, rsETH, a liquid restaking token on Ethereum, and a suite of high-efficiency reward Vaults, Kelp enables users to restake assets, access liquidity, and compound returns across a growing number of integrations and ecosystems. Kelp is now expanding into RWA infrastructure with the launch of KUSD, a yield-bearing stablecoin backed by trade receivables and cross-border payment flows. KUSD supports onchain financing across use cases such as trade finance, cross-border settlement, FX, and payments.

Unlike most RWA protocols that tokenize existing liquid assets (treasuries, money market funds, real estate), Kelp is financing the underlying activity that generates those flows: the invoices, the shipments, the FX settlements. This is a layer of real-world finance that onchain credit markets have not reached.

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Kelp’s Core Product Suite

Kelp’s architecture is built around interconnected products that serve distinct roles to enhance capital efficiency, network security, and yield generation. Each product targets a different layer of user demand, from validator coordination to DeFi liquidity and structured yield.

Restaking

Kelp’s liquid restaking platform has approximately $1.25 billion in total value locked (TVL) as of March 20, 2026, making it the second-largest liquid restaking token (LRT) protocol by TVL. Built on EigenLayer, Kelp issues rsETH, a liquid token that represents restaked ETH. Holders of rsETH earn staking and restaking rewards while retaining the ability to deploy the asset across other DeFi protocols.

By converting restaked ETH into rsETH, Kelp allows participants to use their capital for lending, borrowing, trading, or liquidity provision without giving up rewards. This dual function has made rsETH one of the most widely adopted liquid restaking tokens, now integrated across major DeFi platforms including Aave, Morpho, Spark, Compound, and Uniswap.

Kelp also simplifies restaking participation. Instead of selecting individual services or operators, users delegate through Kelp, which automatically allocates rsETH to Actively Validated Services (AVSs) and Decentralized Verifier Networks (DVNs). This lowers barriers for stakers while ensuring that security is distributed to where it is needed in the ecosystem.

Vaults

Kelp’s reward-optimization layer simplifies the complexity of DeFi yield into automated vaults. Smart contracts manage deposits and mint composable vault tokens that users can deploy elsewhere to stack returns.

The suite consists of three core vaults:

Airdrop Gain (agETH) is a strategy that aggregates onchain ETH yield across multiple DeFi venues. The vault allocates capital dynamically across lending protocols such as Aave and Compound, decentralized exchanges (DEXs) such as Uniswap and Velodrome, and staking mechanisms.

High Gain (hgETH) offers a more aggressive approach by allocating restaked ETH and liquid staking tokens across higher-yield DeFi strategies, including lending and structured yield protocols. Since launch, the High Gain vault has consistently delivered an average yield of around 10%.

Stable Gain enables users to deploy USDC or USDT into curated strategies across protocols such as Aave, Spark, and Pendle. Deposits are tokenized into sbUSD, a liquid ERC-20 token that can be used within DeFi while continuing to earn yield from underlying stablecoin strategies. Stable Gain complements the existing Airdrop and High Gain vaults by offering a lower-volatility option, making Kelp accessible to users seeking more predictable returns.

Collectively, these vaults manage over $66.4 million in TVL as of March 20, 2026. Each vault mints composable tokens that can be deployed across DeFi to generate additional yield, offering users not just one layer of rewards but the ability to stack returns across protocols. Kelp’s vaults automate delegation, vault composition, and reward harvesting, so users do not need to actively manage multiple positions or track ecosystem updates.

On-Demand Credit for the Instant Economy

Kelp has built a strong foundation since its launch, with $1.25 billion in TVL and an annualized revenue of $3.0 million as of March 20, 2026. With significant assets now held in smart contracts and a growing user base across Ethereum and other chains, the protocol is expanding into real-world finance with KUSD, a yield-bearing stablecoin powered by short-term receivables across trade finance and cross-border payments.

Stablecoin supply has crossed $300 billion, but incremental adoption is coming from payments, cross-border settlement, and treasury operations, not trading-driven demand. The credit infrastructure to serve these use cases does not exist onchain. Global trade receivables exceed $25 trillion annually, with a $2.5 trillion financing gap that remains underserved by traditional banks. Cross-border payment flows exceed $200 trillion annually. Existing lending protocols are built for speculative overcollateralization, not short-duration trade cycles or high-velocity settlement flows. Most RWA protocols address this gap by tokenizing existing assets. Kelp instead focuses on financing settlement activity itself, targeting the moment of payment and settlement that existing markets rarely serve.

Rather than relying on token incentives or leverage-driven spreads, KUSD’s targeted yield profile of over 10% is sourced from credit repayments tied to underlying business activity. The structure emphasizes short-term exposures, typically hours to days rather than weeks, combined with overcollateralization and counterparty verification. Risk monitoring is supported through Proof-of-Reserves frameworks and oracle-based reporting mechanisms.

Businesses currently hold trillions in prefunded capital to manage settlement delays. Across traditional finance, payment processors, FX desks, and PayFi, corporates park excess liquidity in advance to ensure transactions clear, tying up significant working capital. This capital may be needed for only minutes or hours, but is often immobilized for days, limiting throughput and increasing balance sheet strain. Kelp replaces prefunding with on-demand credit. Liquidity is drawn only at the point of settlement, repaid as transactions clear, and made available for reuse. This shifts settlement liquidity from idle float to just-in-time credit, improving capital efficiency while keeping credit duration short and exposure tightly bounded.

For liquidity providers (LPs), the credit layer reframes stablecoin yield as a function of real economic activity. Instead of choosing between idle stablecoins or yields dependent on leverage, volatility, or temporary incentives, LPs earn from short-duration, collateralized credit extended to verified counterparties. KUSD implements this model by representing claims on short-duration receivables backed by verified commercial activity, with returns sourced from borrower repayments rather than token emissions. Taken together, Kelp’s credit layer positions onchain credit as financial infrastructure, where stablecoins support settlement, RWAs generate yield, and capital efficiency becomes the primary scaling constraint. According to the Kelp team, sophisticated LPs can leverage sKUSD's composability within DeFi protocols to implement additional strategies that may increase total yield on KUSD to an estimated 20%.

KUSD

Liquidity providers mint KUSD by depositing approved stablecoins, making capital available as collateralized, short-duration credit lines to verified institutional borrowers. Borrowers draw liquidity on demand and repay principal plus interest as transactions settle, with repayment flows accruing onchain to KUSD holders. These links directly enable real-world payment activity, such as payroll processing, trade settlement, and cross-border payouts.

KUSD maintains its peg through a controlled mint and redemption framework anchored to underlying stablecoin reserves and short-duration credit exposure. KUSD is minted one-to-one against deposited stablecoins and can be redeemed directly by KYB-verified entities. Secondary market liquidity on decentralized exchanges provides exit paths for non-KYB holders. Because credit duration is short and capital is continuously recycled, outstanding exposure is actively managed to preserve liquidity and redemption confidence. The peg is further supported by overcollateralization at the borrower level and a strong Proof of Reserves framework in partnership with Chainlink, with reserve attestations verified by multiple independent parties to enhance transparency and redemption confidence.

Yield is earned by staking KUSD into sKUSD, which accrues interest from borrower repayments as credit cycles complete. At inception, sKUSD is issued at parity with KUSD, and its value increases over time as interest is compounded in the staking contract. Returns are variable and utilization-dependent, but are structured to reflect recurring payment flows rather than leverage- or incentive-driven demand. Yield distribution is smoothed through periodic settlement of borrower interest, reducing short-term volatility and anchoring returns to underlying cash flow generation.

sKUSD remains fully composable within DeFi. While earning yield from credit repayments, it can be deployed across lending protocols, used as collateral, or provided as liquidity on decentralized exchanges. This allows holders to layer additional return streams on top of the base sKUSD yield, increasing capital efficiency by generating income from both real-world credit exposure and onchain financial activity.

From a risk perspective, KUSD emphasizes transparency, short credit duration, and layered protection. All borrowers are subject to KYB processes. Real-time collateral valuation, automated margining, and predefined liquidation procedures are enforced at the protocol level. An insurance fund, capitalized through protocol revenues, is designed to absorb losses in the event of borrower default and preserve overcollateralization across the system. Together, these mechanisms position KUSD as a yield-bearing stablecoin grounded in settlement-driven credit, with risk managed through structure rather than discretionary intervention.

The Credit Infrastructure

Kelp’s credit infrastructure establishes an onchain framework for short-term business financing. Verified institutional borrowers access predefined credit lines backed by liquidity from KUSD holders, drawing capital as needed and repaying principal plus interest as underlying transactions settle.

The system is designed to serve settlement-driven demand across payments, trade finance, foreign exchange operations, and treasury workflows, areas that are not well aligned with DeFi lending markets structured around longer-duration, overcollateralized speculative borrowing. Credit tenors are measured in minutes or hours rather than days or weeks, enabling capital to be recycled multiple times within a single day.

Rather than operating as a passive lending pool, the framework extends credit to verified counterparties under predefined pricing, exposure limits, and repayment terms enforced at the protocol level. The structure emphasizes short-duration exposure, defined risk parameters, and operational enforceability tied to transactional cash flows or other verifiable guarantees.

Real-World Partnerships

KUSD's credit infrastructure is activated through institutional origination partners across trade finance and cross-border payments. The partners featured below represent a selection of Kelp’s real-world network, not the full picture of borrower relationships. Each partner brings verified deal flow, domain-specific underwriting, and structured collateral, connecting onchain liquidity to real-economy activity.

OpenFX

OpenFX is a real-time international payments infrastructure provider settling billions in cross-border volume monthly across more than 40 currency pairs, with 90% of transactions completed in under 60 minutes. With over $45 billion in volume processed, OpenFX generates the high-frequency, short-duration settlement flows that Kelp's credit layer is built to finance, providing the payment rails while Kelp provides just-in-time liquidity.

TradeQraft

TradeQraft is a commodity trade finance origination and structuring platform working with a global network of vetted traders across energy, agricultural commodities, and metals. With more than $2 billion in transactions facilitated over three years, TradeQraft sources, conducts due diligence on, and structures short-term, self-liquidating transactions (typically 30 to 180 days), connecting underserved commodity traders with alternative capital more quickly and with less friction than traditional banking.

EG Merchants

EG Merchants is a boutique commodity house specializing in dry bulk and sustainable commodities and related assets. EG Merchants and Kelp partnered to tokenize and fund innovative models of trade and freight receivables, bringing commodity trade finance structures onchain and opening a new category of verified, asset-backed borrowers within KUSD’s credit framework.

Capital4Trade

Capital4Trade is a logistics and trade finance network with more than 20 years of experience across the U.S., LATAM, and Europe. The network originates and services short-duration, asset-backed receivables. Capital4Trade enables Kelp’s credit layer to connect onchain liquidity with real-world settlement flows. Through vetted operators, standardized underwriting, and control over goods in transit, the network provides access to verified borrowers and verifiable collateral.

These featured partners give a cross-section of KUSD's real-world credit network: commodity trading, logistics, FX settlement, and tokenized receivables. The common thread across all borrower relationships is verified counterparties, structured and collateralized exposures, and repayment tied to underlying commercial activity.

Conclusion

Kelp has established itself as a leading restaking ecosystem, forming a cohesive stack that secures networks, unlocks liquidity, and simplifies yield generation. Together, these products have attracted $1.25 billion in capital and generated recurring revenue across Ethereum and other supported networks, positioning Kelp as a core infrastructure provider in the restaking market. This track record de-risks Kelp's expansion into a significantly larger market: yield-bearing stablecoins.

The launch of KUSD marks a meaningful expansion of Kelp’s scope. KUSD is designed to address a structural imbalance in the stablecoin market. More than $300 billion in stablecoins are either non-yielding or tied to crypto market-linked strategies. This represents capital sitting idle while a $2.5 trillion trade finance gap goes unfunded, and trillions more are locked in prefunded settlement buffers for cross-border payments. KUSD addresses both: short-duration credit against verified trade receivables and real-world payment flows, generating yield that exists independently of digital asset price cycles.

KUSD connects stablecoin liquidity to short-duration receivables financing. Stablecoin holders deposit USDC or USDT, and capital is extended to verified institutional borrowers for short tenors, typically hours to days, to support payment processing and settlement flows. The targeted yield of more than 10% is derived from borrower repayments rather than token incentives or leverage-driven spreads. Credit exposure is structured as short-term and overcollateralized, with returns linked to recurring transactional activity rather than to speculative market conditions.

Kelp is poised to bridge decentralized infrastructure and real-world finance. By prioritizing short-duration credit against verified trade receivables and settlement flows over speculative incentives, the protocol positions itself to serve trade finance, payments, and treasury operations at scale. While many RWA protocols focus on digitizing assets that already trade in traditional markets, Kelp instead targets the financing of underlying receivables and settlement activity that those markets generate. If successful, this will position Kelp not as a restaking platform expanding into credit, but as financial infrastructure where stablecoins, yield generation, and real-world settlement activity converge.