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The Mission of Kite AI
Kite AI is building the first blockchain for agentic payments, a foundational platform where autonomous AI agents can operate with verifiable identity, programmable governance, and seamless payments. The company's purpose-built Layer-1 blockchain and Agent Passport system enable AI agents to function as first-class economic actors, creating emergent capabilities through composable interactions. Founded by AI and data infrastructure veterans from Databricks, Uber, and UC Berkeley, Kite AI has raised $35 million from top-tier investors, including PayPal, General Catalyst, Coinbase Ventures and leading blockchain foundations.
Kite AI Network Overview
The Kite AI blockchain is a Proof‑of‑Stake (PoS) EVM‑compatible Layer‑1 chain that serves as a low‑cost, real‑time payment mechanism and coordination layer necessary for autonomous agents to interoperate. Alongside the L1 is a suite of modules, modular ecosystems that expose curated AI services (e.g., data, models, and agents) to users. Modules operate as semi‑independent communities that interact with the L1 for settlement and attribution, while providing specialized environments tailored to particular verticals. Together, the L1 and Modules form a tightly coupled ecosystem where users may assume distinct roles module owners, validators, or delegators and the native token KITE drives incentives, staking, and governance.
KITE Token Utilities
The utility of the KITE token will be rolled out in two phases: Phase 1 utilities are introduced at the time of token generation so that early adopters can immediately participate in the Kite network, while Phase 2 utilities will be added with the launch of the Mainnet.
Phase 1 Utilities
Module Liquidity Requirements - Module owners who have their own tokens must lock KITE into permanent liquidity pools paired with their module tokens to activate their modules. This requirement scales with module size and usage, creating deep liquidity while removing tokens from circulation. Liquidity positions are non-withdrawable while modules remain active, ensuring long-term token commitment from the most value-generating participants.
Ecosystem Access & Eligibility - Builders and AI service providers must hold KITE to be eligible to integrate into the Kite ecosystem. This gives the KITE token immediate utility as an access token to participate in the agentic payment ecosystem and aligns the interests of businesses and builders with that of the Kite network as a whole.
Ecosystem Incentives - A portion of the KITE supply will be distributed to users and businesses who bring value to the Kite ecosystem.
Phase 2 Utilities
AI Service Commissions - The protocol collects a small commission from each AI service transaction and can swap it for KITE on the open market before distributing it to the module and the Kite L1. This ensures that service operators receive payment in their currency of choice while the module and L1 can receive native tokens that increase their stake and influence within the ecosystem. Protocol margins are converted from stablecoin revenues into KITE, creating continuous buy pressure tied directly to real AI service usage and revenues, ensuring token value scales with network adoption.
Staking - Staking KITE secures the network and grants users eligibility to perform services in exchange for rewards. Module owners develop, operate, and manage a module on the Kite network, validators participate in a Proof-of-Stake consensus, and delegators stake tokens to secure and support modules they find value in.
Governance - Token holders vote on protocol upgrades, incentive structures, and module performance requirements, aligning the interests of stakeholders with long‑term network health.
Modules, Validators, and Delegators
Kite validators secure the network by staking tokens and participating in consensus. Each validator selects a specific module to stake on, so that incentives are aligned with that module’s performance. Core responsibilities include maintaining network security and consensus stability, participating in governance and voting, and advancing community collaboration and ecosystem growth.
Kite delegators stake tokens to secure the network. Each delegator must select a specific module to stake on, aligning their incentives with that module’s performance. Delegators are expected to take part in ecosystem governance and engage with the community.
Modules, validators, and delegators receive token emissions through a novel continuous reward system designed to incentivize long-term holding. Participants accumulate KITE rewards over time in a "piggy bank"—they can claim and sell their accumulated tokens at any point, but doing so permanently voids all future emissions to that address. The mechanism transforms token recipients into long-term aligned stakeholders who must weigh immediate liquidity against ongoing value accrual.
Initial KITE Allocation
The total supply of KITE is capped at 10 billion and distributed as follows.

Ecosystem and Community (48%) - Ecosystem and community tokens are dedicated to accelerating user adoption, builder and developer engagement, and ecosystem liquidity. They will fund community airdrops, liquidity programs, and growth initiatives that expand participation, reward meaningful contributions, and drive Kite’s transition from launch to broad utility.
Investors (12%) - Investor tokens are distributed under structured vesting schedules to align investor interests with the network's long-term growth, ensuring that early financial supporters remain committed as the ecosystem expands.
Modules (20%) - Tokens allocated to modules will be used to incentivize the development of high-quality AI services and to expand the infrastructure that enables users to interact seamlessly with the Kite ecosystem. These funds will support developer grants, performance-based rewards, and the build-out of services that enhance both the intelligence and accessibility of the network.
Team, Advisors, and Early Contributors (20%) - Tokens allocated to the team, advisors, and early contributors align the long-term incentives of Kite’s builders with the network’s sustained success. These allocations reward early contributors, developers, and strategic advisors who are building and scaling the network, with multi-year vesting schedules that promote stability and accountability as the ecosystem matures.

The Kite Network Value Capture
Revenue-Driven Network Growth - Kite AI implements multiple mechanisms that directly tie token value to network revenues and usage. A percentage of fees from AI service transactions is collected as commission for modules and the network. This ensures the token can benefit directly from every transaction on the network. As modules grow and generate more revenue, additional KITE is locked into their liquidity pools.
Non-Inflationary Economics - Unlike traditional PoS networks that rely on perpetual token inflation, KITE transitions rapidly from emissions-based rewards to a sustainable model powered entirely by protocol revenues. Initial emissions from a dedicated reward pool bootstrap early network participation, but the system is designed to transition to revenue-driven rewards funded by real AI service usage. This ensures token holders are never diluted by inflation–instead, rewards come directly from value created within the ecosystem.
Together, these mechanisms create a tokenomic system where real AI demand directly drives token value through multiple reinforcing loops: service usage generates revenues, successful modules lock more liquidity, and high-value participants are incentivized to continue creating value capture for the Kite network. The result is a token whose value is fundamentally linked to the utility and adoption of the Kite AI network.

#KITE @KITE AI $KITE

Wesentliche Bausteine, die autonome Agentenoperationen im Kite-Ökosystem ermöglichen.
Kernentitäten
Benutzer
Menschlicher Hauptverantwortlicher, der AI-Agenten besitzt und kontrolliert:
Verwaltet Master-Wallets (Wurzel des kryptografischen Vertrauens)
Delegiert Fähigkeiten und behält dabei die letztendliche Autorität
Setzt globale Richtlinien, die durch alle Agenten wirken
Bleibt rechtlich verantwortlich für die Handlungen des Agenten
Agent
Autonomes Programm, das im Namen eines Benutzers handelt:
Führt komplexe Aufgaben über mehrere Dienste hinweg aus
Verwaltet echtes Geld innerhalb kryptografisch durchgesetzter Grenzen

Stablecoins are a “safe haven” in crypto, providing a semblance of price stability in a notoriously volatile market. Typically pegged to a fiat currency like the US dollar, they became integral to everything from trading and lending to yield farming and cross-border payments. However, a question remains: which stablecoin models and other fiat-pegged crypto assets are the most capital-efficient? While traditional stablecoins rely on centralized reserves, their modern counterparts offer more flexibility using various principles such as overcollateralization or other strategies. This article delves into the concept of capital efficiency and compares the different models of modern synthetic dollar projects, exploring whether any of them can outperform the good-old overcollateralization principle.
What is Capital Efficiency in Crypto?
At its core, capital efficiency is a measure of how effectively assets are used to generate returns or create value. In the context of crypto, it refers to the ability to maximize the output of a given amount of capital, minimizing idle or underutilized assets. For stablecoins, capital efficiency is a particularly crucial metric. A highly capital-efficient stablecoin can scale more easily, offer better yields to its users, and integrate more seamlessly into the broader DeFi ecosystem. Conversely, a capital-inefficient stablecoin can be a drag on the system, locking up excessive amounts of capital and limiting its potential for growth.
The importance of capital efficiency in DeFi cannot be overstated. In a world where liquidity is king, the ability to do more with less is a significant competitive advantage. For users, it means their capital is working harder for them, generating higher returns. For protocols, it means they can scale more rapidly, attract more users, and build more innovative products and services. As the crypto market continues to grow, the demand for capital-efficient solutions will only intensify, making the debate between different stablecoin models more relevant than ever.
The Overcollateralized Model: From Legacy Systems to Modern Implementations
The overcollateralized model is the most established and battle-tested approach to creating decentralized stablecoins. The premise is simple: to mint a certain value of stablecoins, a user must lock up a greater value of collateral in a smart contract. This excess collateral acts as a buffer, protecting the stablecoin from de-pegging in the event of a market downturn.
A foundational example of this model is MakerDAO’s DAI. For years, it set the standard for decentralized stablecoins by requiring users to deposit crypto assets like Ethereum (ETH) into a vault at a collateralization ratio often exceeding 150%. In March 2024, MakerDAO underwent a significant transformation called “Endgame,” which includes a rebrand to Sky Money and the introduction of a new token, USDS.
Although new features within Sky, such as swapping stablecoins for USDS, may not require overcollateralization, the legacy DAI system de-facto continues to operate in parallel. This means the vast pool of DAI tokens remains operational and fully overcollateralized. As of mid-July 2025, Sky’s total collateralization ratio (including legacy DAI) is roughly 145%. This robust buffer underscores the protocol’s continued reliance on overcollateralization during its transition, while also providing a stable backbone to experiment with more modern, capital-efficient strategies.
The Synthetic Model: Capital Efficiency Through Financial Engineering
In stark contrast to the overcollateralized model, the synthetic model takes a more sophisticated and capital-efficient approach to stablecoin design. Instead of relying on a large buffer of excess collateral, these protocols use derivatives and other financial strategies to maintain their peg, often achieving a 1:1 backing ratio.
A leading example is Ethena’s USDe. Ethena maintains its peg through a “delta-neutral” hedging strategy. This involves holding a long position in a spot asset, such as ETH, while simultaneously holding a corresponding short position in a perpetual futures contract for the same asset. The opposing positions are designed to cancel each other out in terms of price exposure; if the value of the spot ETH decreases, the value of the short position increases by a similar amount, and vice versa. This neutralization of price risk allows Ethena to mint USDe with a 1:1 backing, unlocking significant capital efficiency. The yield for USDe holders is generated from the funding rate paid on the short futures position and staking rewards from the spot asset.
Other projects have adopted similar delta-neutral strategies. UXD Protocol, for instance, also issues a stablecoin (UXD) that is fully backed by a delta-neutral position using perpetual swaps. Users can deposit an asset like SOL, and the protocol opens an equivalent short position in SOL perpetual futures, allowing for the minting of UXD at a 1:1 ratio without the need for overcollateralization. The funding rate earned from this position is passed on to UXD holders, creating a native yield.
The primary advantage of the synthetic model is its higher capital efficiency and scalability. By eliminating the need for overcollateralization, these stablecoins can grow more rapidly and offer attractive, market-driven yields. However, this model introduces a different set of risks. It is heavily reliant on the proper functioning of derivatives markets, including the stability of funding rates, which can turn negative and erode reserves. There is also inherent smart contract risk and counterparty risk associated with the exchanges where the derivative positions are held.
Falcon Finance: Combining Overcollateralization with Synthetic Yield
A more modern protocol, Falcon Finance, presents a "best of both worlds" approach, blending the security of overcollateralization with the sophisticated capital efficiency of synthetic models. It issues its own synthetic dollar, USDf, by uniquely combining two distinct collateralization methods.
On one hand, it embraces the battle-tested principle of overcollateralization for volatile assets. When users deposit non-stablecoin assets like BTC, ETH, or other altcoins, they are required to lock up more value than the USDf they receive. This extra collateral serves as a critical buffer against the inherent price volatility of these assets, ensuring that USDf remains fully backed even during sharp market downturns. Crucially, these overcollateralization rates are not static; they are dynamically adjusted for each asset based on its specific risk profile, including volatility and liquidity.
On the other hand, Falcon Finance achieves high capital efficiency by accepting stablecoins like USDC and USDT, allowing users to mint USDf at a direct 1:1 ratio. This dual approach allows the protocol to safely expand its collateral base with a wide range of altcoins while simultaneously providing a highly efficient on-ramp for stable capital.
Furthermore, Falcon’s capital efficiency and yield generation are not reliant on a single mechanism. The protocol employs a diversified suite of strategies to ensure consistent yields regardless of market conditions. These strategies include:
Positive and negative funding rate arbitrage. Falcon can capture yield from positive funding rates by holding spot assets while shorting perpetual futures. Conversely, it can also generate yield in negative funding rate environments by selling spot holdings and longing futures.Cross-exchange price arbitrage. The protocol actively profits from price differences by buying and selling assets across multiple markets.Native altcoin staking. Falcon Finance leverages the native staking yields available for supported non-stablecoin assets, adding another layer to its diversified yield strategy.Liquidity pools. A portion of the protocol’s assets are deployed into Tier-1 on-chain liquidity pools to generate yield from DEX trading activity and arbitrage.
By combining risk-adjusted overcollateralization for volatile assets, 1:1 minting for stablecoins, and a multi-pronged yield generation engine, Falcon Finance aims to offer the robustness of legacy models with the advanced capital efficiency and yield potential of modern synthetic protocols.
The Verdict: Which Model is Superior?
The choice between stablecoin models presents a clear trade-off. Overcollateralized crypto assets like Sky Money’s DAI offer proven, on-chain security at the cost of low capital efficiency. In contrast, pure synthetic models like Ethena’s USDe provide superior capital efficiency and higher yields but introduce complex risks tied to derivatives markets and counterparty reliability.
In contrast, a hybrid model utilized by Falcon Finance can be a compelling resolution to this trade-off by adopting best practices from the two models. This protocol applies security-focused overcollateralization to volatile altcoins while enabling high capital efficiency through 1:1 minting with stablecoins. Critically, Falcon’s diversified yield engine, which includes different strategies from funding rate arbitrage and native staking to liquidity provision, mitigates the risks of relying on a single mechanism, unlike pure synthetics.
Therefore, the evolution of stablecoins points towards Falcon’s sophisticated hybrid system for achieving the highest capital efficiency. By intelligently balancing the security of overcollateralization with the efficiency of synthetic dollars’ financial engineering, Falcon Finance offers a versatile path forward for yield-generating crypto solutions.

#FalconFinance @Falcon Finance $FF

Kite is built from first principles for autonomous agents, not adapted from human-centric systems. Every architectural decision optimizes for one goal: enabling agents to operate with mathematical safety guarantees.
Architecture Overview
Four-Layer Architecture
Kite implements a four-layer architecture that separates concerns while maintaining security and performance:

Base Layer: EVM-Compatible L1
Optimized specifically for agent transaction patterns:
Stablecoin-native fees: Predictable costs in USDC/pyUSD, eliminating gas token volatilityState channels for micropayments: $0.000001 per message with instant settlementDedicated payment lanes: Isolated blockspace preventing congestionAgent transaction types: Not just payments, but computation requests and API calls embedded in transactions
Platform Layer: Agent-Ready APIs
Abstracts blockchain complexity for developers:
Identity management: Hierarchical wallets with BIP-32 derivationAuthorization APIs: Session key generation and managementPayment processing: State channel opening, signing, and settlementSLA enforcement: Automatic penalty and reward execution
Programmable Trust Layer
Novel primitives that enable trustless agent operations:
Kite Passport: Cryptographic agent IDs with selective disclosurex402 Protocol: Standardized rail for agent-to-agent intents, enabling verifiable message passing, escrowed execution, and settlement across ecosystemsAgent SLAs: Smart contract interaction templates with enforced guaranteesProtocol bridges: Compatibility with A2A, MCP, OAuth 2.1, and AP2Reputation system: Verifiable behavioral history portable across services
Ecosystem Layer
Two interconnected marketplaces:
Application marketplace: AI services registered once, discoverable by millions of agentsAgent ecosystem: Agents coordinate through standard protocolsService discovery: Cryptographic capability attestations enable trustless matchingReputation networks: Global trust scores based on verifiable performance
For detailed architectural components and terminology, see Core Concepts & Terminology
Design Principles
1. Agent-First Architecture
Traditional blockchains assume human users who can manage keys and evaluate risks. Kite breaks this assumption entirely:
Hierarchical Identity: User → Agent → Session with cryptographic delegationProgrammable Constraints: Smart contracts enforce spending limits and operational boundaries that agents cannot exceedSession-Based Security: Ephemeral keys for individual operations, not permanent credentialsAgent Transaction Types: Embedded API requests within payments, not just value transfers
2. Cryptographic Trust Chain
Every action creates verifiable audit trails:
No Direct Key Access: Agents never touch private keys directlyFine-Grained Authorization: Task-level permissions, not agent-levelReputation Without Identity Leakage: Shared reputation with independent identity
3. Sovereignty Through Separation
Decentralized Assets: Self-custodial wallets with smart contract enforcementCentralized Services: Platform APIs for developer experienceBest of Both: Security of decentralization + usability of centralization
4. Native Protocol Compatibility
Rather than creating another isolated protocol, Kite embraces existing standards as first principles:
A2A Protocol: Direct agent coordination across platformsAgent Payment Protocol (AP2): Kite executes AP2 intents with on-chain enforcementMCP: Model interoperability across the entire LLM ecosystemOAuth 2.1: Backward compatibility with existing servicesX402 Standard: Agent-native payments for future developments
5. Mathematical Safety Guarantees
Provable Bounds: Users know exact maximum exposure before authorizing agentsCryptographic Enforcement: Constraints cannot be violated even with total agent compromiseAutomatic Expiration: All authorizations include time-based revocationDefense in Depth: Multiple security layers with graduated impact
6. Economic Viability for Micropayments
Sub-cent Transactions: Enable per-message, per-token, per-request pricingPredictable Costs: Stablecoin fees eliminate gas token volatilityInstant Settlement: Real-time value transfer without waiting periodsGlobal Interoperability: Borderless payments without currency conversion
#KITE @KITE AI $KITE

Falcon Finance's USDf, sUSDf, and PT-sUSDf are now live on Euler Frontier, a new lending infrastructure built for yield-bearing stablecoins. This integration gives you a powerful new way to earn yield, stay liquid, and use stablecoins more efficiently than ever before.
What is Euler Frontier?
Euler Frontier is a permissionless, ungoverned lending infrastructure built to support the growth of stablecoins and their derivatives.
It serves as a template for launching isolated, risk-contained markets centered around a single stablecoin, enabling:
Support for stablecoins and their yield-bearing derivatives (like PTs)One borrowable blue-chip asset: USDCRisk-isolated vaults with LTV ratios of 91–95%Adaptive interest rates and robust oracle feedsHybrid lending + swapping functionality powered by EulerSwap
For protocols, Frontier offers faster asset listings, incentive containment, and up to 50x lower cost of capital for DEX liquidity. For users, it enables capital-efficient borrowing and yield strategies with isolated risk.
Unlike traditional lending protocols where all assets share risk in one pool, Frontier vaults are siloed – giving stablecoin issuers and users more flexibility, safety, and control.
Falcon Assets: USDf, sUSDf, and PT-sUSDf
USDf is Falcon’s overcollateralized synthetic dollar, minted using 20+ supported crypto assets including stablecoins and blue chips. It’s designed to be stable and composable across DeFi.sUSDf is the staked version of USDf. You can stake USDf to earn passive yield through Falcon’s delta-neutral strategies, recently in the 8–12% APY range.PT-sUSDf is the Principal Token you receive when splitting sUSDf via Pendle. It does not accrue yield, but it can be bought below face value and redeemed at full value upon maturity, locking in a predictable fixed return.
This integration unlocks powerful new synthetic dollar strategies:
Stay Liquid While Earning: Supply sUSDf or PT-sUSDf as collateral and continue earning passive yield or fixed return.Borrow Without Selling: Use your synthetic dollars as collateral to borrow USDC for other strategies.Loop or Deploy: With capital unlocked, you can mint or swap for more USDf, provide liquidity, or explore Pendle strategies.
Sample Strategy: Looping on Euler Frontier
Stake USDf → sUSDfSupply sUSDf as collateral on FrontierBorrow USDCMint/swap for more USDf → stake again → repeat
This strategy lets you stack both yield and Falcon Miles, all while staying liquid.
Early Vault Incentives Are Available
Incentives are now live for early explorers, thanks to our joint support with Euler via Merkl. You might notice a little extra rewards in your vault activity!
Final Thoughts
Falcon’s integration with Euler Frontier opens the door to more dynamic, capital-efficient stablecoin strategies. Whether you're looking to earn, borrow, loop, or build, this is a major step forward in how you can get more out of every dollar in DeFi.
#FalconFinance @Falcon Finance $FF

Retail: Agentic Commerce
What it is: Consumers use personal AI agents for end to end online shopping, with and without human interference.
Current Problems:
Consumer is risky to delegate full payment consent to AI agentsMerchant is risky to receive payments from unknown AI entities, which creates anti-money laundering and other fraud concerns
How Kite Helps:
Delegation and guardrails with Kite Passport, which consumer can configure granular controls, and identify both consumer and agent.Payment is always associated with verifiable proof of delegation, which also clarify authenticated user and agent.Kite Payment API for merchants to verify the proof, initiate stablecoin transfers, verify payments.
Manufacturing: Automatic Sourcing
What it is: AI-powered sourcing optimization for manufacturing (cost, lead time, production planning, carbon emissions) including autonomous ordering from manufacturer's agents to suppliers.
Current Problems:
Both manufacturers and suppliers risky to rely transaction on AI agents as the same as agentic commerceHigh foreign exchange costs for international payments
How Kite Helps:
Secure delegation mechanisms by Kite Passport and delegation proof.Stablecoin payments instead of traditional FX which helps exchange cost savings.
Fintech: Investment Portfolio Management
What it is: AI-driven trading strategy and portfolio optimization.
Current Problems:
Traders have to take transactions and operation control with limited prompt instructions.
How Kite Helps:
Programmable and guardrails for investment constraints and risk management
Digital Services: Agent-powered Monetization
What it is: Data, model, and tool services specifically designed for AI agents.
Current Problems:
AI agents lack a trusted way to handle complex micro-transactions autonomously.Pay-per-use monetization for APIs, data, and tools is difficult to integrate.Existing payment systems introduce latency and manual intervention, breaking automation.
How Kite Helps:
Verifiable, autonomous payment infrastructure for AI agents through Kite Passport and delegation proof.Kite Passport to enable agent actions for easy integration.Kite Chain for instant, low-latency settlement through stablecoin-based transactions.
#KITE @KITE AI $KITE