Kaskad is a decentralized, non-custodial lending and borrowing platform built to let users unlock liquidity using their crypto without giving up custody. Users can deposit assets to earn interest or borrow against them through a trustless system powered by smart contracts. The protocol is based on Kaspa’s high-throughput blockDAG and leverages Layer 2 “based rollup” technology that sequences transactions directly onto Kaspa Layer 1. This architecture not only ensures data integrity and decentralization, but also rewards Kaspa miners for their role in securing the network, aligning incentives across the ecosystem.

Kaskad uses a fork of Aave V3.3, one of the most battle-tested and audited lending protocols in DeFi. This gives users confidence in the underlying smart contract architecture, while adapting it for the unique performance and scalability characteristics of Kaspa.

All transactions occur on-chain, and user funds remain in smart contracts they control at all times. Kaskad never holds custody of your assets. You retain your private keys and full ownership, in alignment with the principles of financial sovereignty and trust-minimized design.

While mobile apps are not yet available, the Kaskad platform can be accessed via a secure web interface. iOS and Android apps are planned for future release. Until then, users are encouraged to follow official announcements and avoid third-party or unofficial downloads.

We don’t limit ourselves to on-chain lending and borrowing. A unique feature on our roadmap will enable users to borrow fiat against their crypto and spend it anywhere Visa is accepted, using the Kaskad card infrastructure. This bridges the gap between decentralized finance and everyday financial use.

Using Kaskad requires transactions on Kaspa’s Layer-1 blockchain, which incur minimal gas fees, typically under $0.01, due to Kaspa’s GHOSTDAG protocol. Unlike Ethereum or other reputable networks, Kaspa’s design prevents congestion and ensures the network remains operational, delivering fast, reliable, and low-cost transactions regardless of demand or complexity. These fees, determined by Kaspa’s efficient consensus, support seamless interactions with Kaskad’s smart contracts for supplying, borrowing, and repaying loans.A comparison of statistics on fees, congestion, as well as network latency can be seen here, in order to better comprehend why we chose the Kaspa Layer 1 in order to build our lending platform.

Your funds cannot be frozen by Kaskad because it operates as a non-custodial platform. You control your private keys, and your KAS or borrowed assets remain in your wallet or locked in audited smart contracts, not in Kaskad’s possession. These smart contracts, are immutable and can only be accessed by you for withdrawals or by liquidators if your loan becomes undercollateralized. 

Kaskad complies with minimal regulatory requirements, such as KYC for card issuance, handled by third-party providers like Onfido, but this does not grant Kaskad or its partners authority to freeze assets. Stripe, used for fiat conversions, manages compliance for payment processing, but Kaskad’s decentralized design ensures no centralized entity can intervene in your on-chain assets. This structure protects users from the risks of custodial platforms, where funds might be frozen due to regulatory actions or platform policies, making Kaskad a secure choice for those valuing financial autonomy.

Kaspa is a Layer 1 proof-of-work consensus that aims to fulfil Satoshi’s vision of a P2P decentralised digital cash system. To learn more you can visit here with a brief overview of it’s unique properties, here to see the white papers, or even here to dive deeper into Shai’s book explaining in great detail what Kaspa achieves.

Wrapped cryptocurrencies are tokens that represent the value of another cryptocurrency, typically from a different blockchain, allowing them to be used within a specific blockchain like Kaspa. For example, wBTC is Bitcoin (BTC) “wrapped” into a token compatible with Kaspa L2, enabling it to benefit all the advantages from the Kaspa L1 : namely speed as well as low transaction fees, even using bitcoin !

The original crypto is locked in a secure contract (e.g., via a bridge), and an equivalent amount of the wrapped token is minted on Kaspa’s blockchain. When you redeem the wrapped token, the original crypto is released. This process, facilitated by audited custodians or decentralized bridges, lets you use assets like BTC or ETH on Kaskad without selling them, expanding collateral options while maintaining Kaspa’s fast, low-cost transactions. The Kaskad app will support wrapped assets like wBTC and wETH in V2 (Q3 2025), with clear guides  to help you manage them securely.

Using Kaskad involves several risks, primarily tied to the nature of decentralized lending. The most significant is market volatility, where a sharp drop in $KAS price can reduce your collateral’s value, pushing your loan-to-value ratio above safe levels and triggering a liquidation, where part of your $KAS is sold to repay the loan.

Another risk is smart contract vulnerabilities. While no system is ever entirely risk-free, Kaskad implements best-practice security measures (including audits, permission management, and real-time monitoring) to minimize exposure. You can find more details on these measures in the next FAQ section.

Oracle errors pose a smaller but still relevant risk. Inaccurate price feeds from sources like Chainlink could misvalue your collateral, affecting loan calculations. Kaskad mitigates this by using multiple oracle providers for redundancy and robustness. In parallel, Elliot Mea’s research on oracle architectures adds another layer of anticipation, helping Kaskad stay ahead of emerging risks in decentralized data sourcing.

Kaskad’s interface will also provide real-time alerts and clear metrics to help you manage these risks. Its non-custodial design ensures you retain control over your assets, reducing counterparty exposure compared to centralized platforms.

Kaskad is designed to maximize asset security through a decentralized, non-custodial architecture. Your $KAS and borrowed funds never leave your wallet or the protocol’s audited smart contracts. Kaskad does not hold custody of user assets, which removes the risks typically associated with centralized platforms.

Kaspa’s Layer 1 network is secured by a proof-of-work blockDAG and the kHeavyHash algorithm. It provides strong protection with sub-second finality and has recorded no 51% attacks since its launch in 2021. Since Layer 2 programmability introduces additional complexity, Kaskad adds several layers of security to close that gap.

The smart contracts used by Kaskad are forked from Aave V3.3 and based on infrastructure that has been thoroughly tested across DeFi ecosystems. The code is open source and maintained in a public GitHub repository. Audits are conducted by independent firms before mainnet release, and full reports will be shared with the community.

In some situations, such as participation in community presales, identity verification may be required to meet legal obligations. When this is the case, KYC data is processed securely by a third-party provider and is never stored by Kaskad.

To protect your assets further, we recommend using a hardware wallet such as Ledger, enabling two-factor authentication on connected interfaces, and keeping track of your loan health using Kaskad’s built-in alerts and metrics.

The health factor is a key metric that indicates the safety of your loan on Kaskad, calculated as the collateral value multiplied by the liquidation threshold, divided by the loan value. For example, if you supply $1,000 worth of KAS with an 80% liquidation threshold and borrow $400 in USDC, your health factor is ($1,000 × 0.8) / $400 = 2. A health factor above 1 means your loan is safe; if it falls below 1, due to a KAS price drop or increased loan value, your collateral faces liquidation. 

Maintaining a health factor above 2 provides a buffer against market volatility. The Kaskad app displays your health factor in real-time, with alerts if it approaches 1.5, prompting you to add collateral or repay part of the loan. This metric is critical because it empowers you to proactively manage your loan, preventing unexpected losses and ensuring you understand your financial position at all times.

Kaskad uses smart contracts to protect lenders from unpaid loans. If your health factor falls below 1, meaning your collateral no longer safely covers the value of your borrowed assets, your position becomes eligible for liquidation.

For example, if you borrow USDC against $KAS and the value of your $KAS drops sharply, the protocol will begin to sell part of your collateral to repay the loan. Only a portion of your collateral is liquidated at a time, just enough to restore your loan to a healthy level. A liquidation fee is applied during this process. The exact fee varies depending on the asset, typically between 5 and 15 percent, and is set by the protocol risk parameters.

Any remaining collateral is returned to your wallet after the liquidation. You cannot lose more than the value of your collateral, as all loans on Kaskad are over-collateralized.

To help you manage risk, the interface provides clear metrics and real-time alerts. If your health factor approaches 1, you can act quickly by adding collateral or repaying part of your loan to avoid liquidation.

To supply assets on Kaskad, first connect your wallet to the app on the Layer 2 network. Supported wallets include Kaspium, Kastle, and Kurncy. Once connected, navigate to the “Supply” section.

Select the asset you wish to supply, such as $KAS or other supported Layer 2 tokens, enter the amount, and confirm the transaction through your wallet.

The first time you supply an asset, you’ll be asked to approve the smart contract. This incurs a one-time gas fee of about $0.01 on Kaspa’s network. Once confirmed, your assets are locked in a non-custodial smart contract where they begin earning interest from borrowers and can be used as collateral for borrowing.

The process completes in under a second thanks to Kaspa’s high block rate, and you can track your supplied balance, interest earned, and collateral status in the Dashboard. The interface guides you step by step, and built-in tutorials explain how your assets generate returns, making it accessible for both new and experienced DeFi users.

When you supply assets to Kaskad, they become available in decentralized liquidity pools where borrowers can take loans against posted collateral. Interest is paid by borrowers and distributed proportionally to all suppliers in that asset pool.

The interest rate is dynamic and determined by supply and demand. As more borrowers draw from a given pool, the utilization rate increases, and the interest rate rises accordingly. This ensures that lending markets remain balanced and responsive to user activity.

Once your assets are supplied, they remain in a non-custodial smart contract and begin accruing interest immediately. You can withdraw your funds at any time unless they are actively being used as collateral.

Interest accrues continuously and is reflected in your updated token balance, following the same mechanism used by other leading DeFi protocols built on Aave.

Yes. On Kaskad, any asset you supply can be used as collateral to borrow other supported assets, unless you choose to disable it for that purpose. Once supplied, your tokens are locked in a non-custodial smart contract and become eligible for borrowing based on their loan-to-value (LTV) ratio.

For example, if you supply $1,000 worth of $KAS and the LTV for $KAS is set at 50%, you can borrow up to $500 worth of another supported asset. If you take out a loan, the corresponding amount of your collateral becomes locked until the debt is repaid. However, your collateral continues to earn interest during that time.

Kaskad clearly distinguishes between collateralized and available balances, allowing you to track what is still free to withdraw or use elsewhere. The protocol’s fast transaction finality ensures that collateral adjustments happen quickly, helping you manage your health factor and avoid liquidation during volatile conditions.

Supplying $KAS to Kaskad is generally low-risk but not without potential downsides. The primary risk is market volatility; if you use supplied $KAS as collateral and its price drops, your loan-to-value ratio may increase, risking liquidation. Interest rate fluctuations are another concern, as low borrower demand can reduce your APY, though rates are transparent in the app. Liquidity risk is minimal but possible; if the lending pool is heavily utilized, withdrawals may be delayed until more funds are available, though Kaskad monitors pool health to prevent this. Smart contract vulnerabilities, while unlikely due our security best practices, could affect your assets. To mitigate these risks, supply only what you can afford to lock, monitor your health factor if borrowing, and use Kaskad’s real-time data to make informed decisions. The non-custodial model ensures you retain control, reducing exposure to platform-specific risks.

To borrow on Kaskad, you first need to supply assets as collateral. For example, if you supply $KAS, it will be locked in a smart contract and become available for borrowing other supported assets on the Layer 2 network.

After supplying your collateral, you can choose an asset to borrow and enter the amount you wish to receive. The amount must remain within the allowed loan-to-value (LTV) ratio. If the LTV for $KAS is 50%, and you supply $1,000 worth, you can borrow up to $500 worth of supported assets.

Borrowers can select between a variable interest rate, which adjusts dynamically based on market demand, or a stable interest rate that changes more gradually over time. Rates are calculated by the protocol’s automated interest rate model and updated continuously.

Once the transaction is confirmed, the borrowed assets are sent directly to your wallet. Collateral and borrowing positions are updated in real time, allowing you to track your loan health and take action when needed.

The specific assets available for borrowing on Kaskad depend on what is supported by the underlying Kaspa Layer 2 infrastructures. As the Kaspa ecosystem evolves, several L2 solutions are beginning to support assets like USDT and USDC, which are often used for stable borrowing needs.

Given the pace of development across Kaspa's L1 & L2 landscape, we anticipate a growing selection of high-quality, widely recognized assets will be available for borrowing soon. Kaskad is built to integrate with these expanding options, offering users a flexible and decentralized way to access liquidity using their crypto holdings.

To stay updated on supported assets and lending pool activity, follow our announcements and protocol updates.

Repaying a loan on Kaskad is simple. You can repay the full amount or make partial repayments at any time, directly through your connected wallet. There are no penalties for early repayment, and reducing your outstanding debt helps improve your health factor, lowering the risk of liquidation.

For example, if you borrowed funds and choose to repay a portion, your loan-to-value ratio adjusts accordingly, giving you more safety margin. Repayments can be made in the same asset you borrowed, and transactions are processed in real time through the underlying smart contract.

Kaskad is designed to support flexible loan management, allowing you to adapt your repayment strategy as market conditions evolve.

Borrowing on Kaskad carries the same core risks as any decentralized lending platform. The most significant is liquidation. If the value of your collateral drops and your loan-to-value ratio (LTV) exceeds safe thresholds, a portion of your assets may be sold automatically to repay the loan. This protects lenders but can result in a partial loss of your collateral.

Variable interest rates can also fluctuate during periods of high demand or market stress. Stable rate options tend to adjust more slowly, but they are still subject to change. Borrowers should also remain aware of the risk associated with price feed or stable asset volatility, which can influence the health factor tied to their loan.

Lastly, smart contract or oracle malfunctions, while mitigated by best practices and redundancy, could affect loan calculations. Borrowing conservatively, actively monitoring your loan health, and maintaining adequate collateral buffers are key strategies to reduce exposure to these risks.

A liquidation occurs when a loan's health factor drops below 1, meaning the collateral no longer adequately covers the borrowed amount. This usually happens if the value of the collateral decreases significantly.

When this threshold is reached, Kaskad’s smart contract automatically sells part of the collateral to repay the loan and applies a liquidation fee. For example, if $1,000 worth of $KAS was supplied and $400 borrowed, a price drop that brings the health factor below 1 could trigger the sale of approximately $420 worth of collateral. This covers the outstanding loan and a 5% fee designed to protect lenders.

Liquidations occur on-chain, using decentralized execution mechanisms to minimize slippage. Remaining collateral is returned to the user’s wallet. Transaction records and liquidation events are fully transparent and verifiable through Kaspa’s block explorer.

Preventing liquidations requires proactive loan management, and Kaskad provides tools to help. The most effective strategy is to maintain a health factor well above 1. You can monitor this in real time through the app’s dashboard. If your health factor approaches 1.5 due to market movements, the app sends alerts prompting you to add more collateral or repay part of your loan.

Borrowing conservatively also helps reduce risk. For example, staying around a 30% loan-to-value ratio instead of 50% gives you more buffer against volatility. Kaskad’s alert system allows you to act before reaching critical thresholds, helping you preserve your collateral.

Future versions of Kaskad will include enhanced risk management tools and documentation to support users who prefer not to manually monitor collateral value. Until then, staying informed and reacting promptly is the best way to avoid liquidation.

When your health factor drops below 1, Kaskad’s smart contracts automatically trigger a liquidation to repay part of your loan and protect the protocol. A portion of your collateral is sold via a Kaspa-based decentralized exchange to cover the outstanding debt, along with a liquidation fee that incentivizes the process. For example, if your loan is $400 and your collateral value falls too low, the system may sell around $420 worth of KAS to restore balance. Any excess collateral is returned to your wallet.

Kaspa’s fast block confirmations help ensure the liquidation process executes quickly, reducing slippage in volatile markets. After liquidation, the “Borrowings” section of the app updates your repaid amount, remaining collateral, and current balance. All actions are recorded on Kaspa Explorer for full transparency.

On Kaskad, liquidations are handled entirely on-chain through smart contracts. When a user’s health factor falls below 1, the protocol automatically initiates a liquidation. This mechanism is permissionless and doesn’t rely on third-party actors or custom bots. The smart contract enforces the liquidation terms directly, applying a fixed liquidation fee and using decentralized liquidity sources to settle the position.

This ensures consistent execution under predefined rules, protecting lenders while maintaining system solvency. Only positions that are undercollateralized can be liquidated. Healthy loans remain untouched.

As a borrower, you can avoid liquidation by monitoring your health factor and reacting early. The app sends real-time alerts when your position approaches risk thresholds, giving you time to add collateral or reduce your outstanding debt. This design gives users control while ensuring the system operates predictably and transparently.