On May 28, 2025, the Katana Foundation, a nonprofit organization dedicated to decentralized finance (DeFi) development, launched its private mainnet with the incubation of GSR Markets and Polygon Labs. The public mainnet is scheduled to be launched in June. Here are the details:
Aims and Goals: The Katana blockchain aims to solve the problem of liquidity fragmentation in the crypto industry, which is one of the main obstacles restricting the participation of institutional investors in DeFi. It achieves this by concentrating the liquidity from multiple protocols and collecting yields from all potential sources. This creates an ecosystem with deeper liquidity and more predictable lending and borrowing rates, enabling users to obtain higher yields and explore DeFi in a “unique, optimized yield environment”.
Technical Features: The liquidity pool of Katana consists of multiple protocols, including the lending protocol Morpho, the decentralized exchange (DEX) Sushi, and the perpetual DEX Vertex. This allows users to trade “blue – chip assets” without the need for cross – chain transfers. In addition, Katana has incorporated Conduit’s sequences and Chainlink’s decentralized oracle network.
Yield Generation and Distribution: Katana aims to increase sustainable yield by building a cohesive DeFi ecosystem. For example, the Vault Bridge protocol deploys bridged assets into over – collateralized, curated lending strategies on Ethereum via Morpho to earn yield, and then routes it back to Katana for compounding. The protocol will reinvest network fees and a portion of application revenue back into the ecosystem. Yield is distributed pro – rata to each chain using the Vault Bridge protocol based on their share of total deposits. Katana will then allocate its share of the yield to users through enhanced DeFi incentives across “core apps” such as Sushi, Morpho, or Vertex.
Market Outlook: According to a survey by management consulting firm EY – Parthenon, institutional participation in DeFi is expected to triple in the next two years, rising from 24% to 75% among 350 surveyed institutional investors. The launch of the Katana blockchain is timely to meet the growing demand for institutional liquidity.
However, regulatory uncertainty remains a major obstacle to the adoption of DeFi by institutions. 57% of institutional investors surveyed believe that regulatory concerns are the main reason for not planning to participate in DeFi activities.
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