Let’s look at a real-world example.
Tom believes in Kaspa’s long-term potential. He owns 10,000 $KAS, worth approximately $1,200 at the current price ($0.12/KAS).
He wants to hold onto them, but he needs $400 for an unexpected expense — like buying a new phone. Instead of selling his $KAS, Tom uses Kaskad to borrow $400 in stablecoins, posting his 10,000 $KAS as collateral. This gives him a loan-to-value (LTV) ratio of 33%, offering a solid safety margin. In return, Tom pays a reasonable interest rate over the duration of the loan. As long as he stays within the terms of the agreement (i.e., avoids undercollateralization), his $KAS remains locked and secure. Once he repays the loan—principal plus interest—he can unlock and retrieve his remaining $KAS, proportional to the $KAS price at the time.
This is smart: if the value of $KAS has increased, Tom gets back more value than if he had sold his tokens when he bought the phone, while still enjoying access to the liquidity when he needed it.
If he fails to repay, or if the value of Kaspa drops significantly without him adjusting his position, a partial or full liquidation may occur.
