What Is Katana? The Liquidity Engine of Agglayer

Katana is the first DeFi-native blockchain to launch on Agglayer, bringing deep liquidity, real yield, and a new economic model to the multichain world. 

Incubated by Polygon Labs and GSR as a part of the Agglayer Breakout Program, Katana was reverse engineered to deliver what Agglayer needs and users want: deep liquidity and real yield. 

VaultBridge, Katana’s innovative yield generator, anchors this vision. By routing yield from vaults on Ethereum back into the Katana ecosystem, VaultBridge drives high yield for users and strengthens the entire Agglayer economy.

Built with the Agglayer CDK OP Stack, Katana lays the groundwork for Agglayer's evolution into a multistack, multichain network.

Katana Foundation plans to incentivize POL staking to support validation of transactions on Agglayer by airdropping 15% of native tokens to POL stakers, including liquid staking protocols, on Ethereum.

Whether you're a builder, DeFi user, or crypto-native explorer, here's everything you need to know about Katana and why it matters for the future of blockchain networks.

A quick overview of Katana

General-purpose blockchains helped crypto scale, but they’re no longer the endgame. We’re seeing a clear trend: purpose-built networks with dedicated blockspace. When a chain can be designed for a specific purpose, everything works better. 

Katana is optimized from the ground up to create the best DeFi user experience. With real yield and core apps that concentrate liquidity, Katana gives every asset more utility and every user a better experience.

The Katana Foundation will develop Katana going forward, but the network was incubated with support from GSR (a leading liquidity provider) and Polygon Labs. Together, these teams incubated a next-gen DeFi platform with institutional-grade performance.

Katana joins a broader Agglayer ecosystem where chains are unified into the feel of a single experience, sharing users and liquidity.

Why Katana Was Created

DeFi today is broken. 

Liquidity is fragmented, yields are inconsistent, and chains compete for users instead of cooperating. Inflationary token emissions and value leakage are common — but unsustainable.

Katana flips this model. It recycles 100% of net sequencer revenue and a portion of core app fees into the ecosystem; directs incentives toward productive capital; and consolidates DeFi infrastructure into a unified experience. 

It's designed to grow with usage, not inflate with speculation.

Key Features of Katana

Chain-Owned Liquidity (COL)

Instead of relying solely on user deposits, Katana uses protocol and sequencer revenue to seed sustainable, deep liquidity — making its markets more resilient and efficient. For Agglayer, a chain with deep liquidity is an important engine for cross-chain economic activity.

VaultBridge: Yield Generator

With VaultBridge, bridged ETH, USDC, and WBTC are deposited into institutional-grade vaults via Morpho on Ethereum, with the yield routed back to Katana. 

It's a sustainable alternative to sequencer skim models — and it's available plug-and-play for all Agglayer chains.

Productive TVL

Users are incentivized to be productive via boosted yield from VaultBridge. From lending via Morpho to trading on Vertex and yield aggregation through Yearn, liquidity is concentrated and incentives are aligned.

AUSD: The Yield-Bearing Stablecoin

AUSD is a native stablecoin designed to support yield and liquidity. Backed by real-world assets like T-bills, AUSD helps power DeFi across all Agglayer-connected chains. Yield generated by T-bills go to boosted rewards on AUSD-denominated pools.

How Katana Connects to Agglayer

Katana is the first chain on Agglayer to use the CDK OP Stack, which will feature forthcoming ZK proofs. This architecture enables institutional-grade security with developer-friendly tooling that CTOs and technical teams already know. 

Katana has set the stage for a multistack Agglayer where builders can launch with the tooling they prefer, regardless of consensus mechanism or underlying architecture.

By using Agglayer as its bridge and coordination layer, Katana enables smooth asset and app movement between chains. Liquidity isn't trapped — it flows, grows, and compounds across the network.

To encourage securing Agglayer, Katana is allocating 15% of KAT tokens to POL stakers.

Katana's Core Apps and Assets 

Katana's core apps and assets are curated for performance and long-term alignment. The purpose is to concentrate liquidity, rather than pit different apps and assets against one another. At launch, the network includes:

Core apps:

• Morpho for optimized lending and borrowing
• Sushi for deep spot trading liquidity
• Vertex for capital-efficient perpetuals trading

Core assets:

• Agora for AUSD native stablecoin issuance
• BitVault for BTC-backed yield-bearing stablecoins
• Ether.fi for restaked ETH assets
• Jito for staked SOL assets
• Lombard for yield-bearing BTC wrappers
• Universal for cross-chain asset minting

Incubators:

• GSR
• Polygon Labs

FAQs

What makes Katana's liquidity model different from other blockchains?

Unlike traditional blockchains that rely on mercenary liquidity, Katana's chain-owned liquidity (CoL) model captures protocol fees and sequencer revenue to build sustainable, protocol-controlled liquidity pools. This creates a self-reinforcing cycle where network activity directly strengthens liquidity depth.

Why Katana Matters to the Agglayer Vision

Katana proves that purpose-built chains plugged into a unified network are more powerful than isolated blockchains. This is the first in-production use of VaultBridge. It brings users, capital, and value to Agglayer, and showcases how future chains can launch with strong fundamentals and network-level benefits from day one.

How to Get Involved

• Pre-deposit ETH, USDC, WBTC, and USDT → Start winning rewards
• Follow @Agglayer and @Katana for updates
• Start building on Katana testnet: https://docs.katana.network/
• Explore Katana's open-source repositories: https://github.com/katana-network/

Katana is just the beginning. 

As more chains connect to Agglayer, the network becomes better, stronger, and more liquid. If you're building in DeFi — or want to — Katana is the chain to watch.