Syncratix and kUSD

Syncratix and kUSD are related but not interchangeable terms. Syncratix is the underlying architecture; kUSD is the first instrument and reference configuration built on it. An issuer can adopt the Syncratix model while configuring the product around its own market, Reserve, governance and regulatory requirements.

Product description: kUSD smart contracts

• A double-entry balance-sheet architecture for issuance, Bonds, settlement, Equity and wind-down.
• kUSD itself, with a 40-maturity bond market extending to ten years.
• State-dependent issuance pricing that retains the issuance premium as Reserve buffer rather than issuer revenue.
• A daily risk charge, the Hazard, paid by the Bond layer to liquid holders for the balance-sheet capacity it uses.
• A predefined profit-and-loss waterfall that fixes seniority before losses occur.
• Custody and accounting boundaries designed so managers can allocate assets without directly writing the ledger.
• A configurable architecture adaptable to different issuers, Reserve policies, valuation arrangements, governance structures and denominations.
• Implementations for public permissionless and institutional private or regulated market environments.

Liquidation

There is no redemption mechanism for kUSD holders into USD (USDC) during the normal course of business. Syncratix includes a specified terminal path rather than leaving liquidation mechanics to be designed during a crisis. Once wind-down is declared, going-concern mechanics stop and the system moves to realisation, ranking and distribution.

Liquidation Triggers

• Voluntary liquidation by Equity.
• Events of default triggers.
• Partial tender for kUSD.

The Reserve is applied through the seniority order. Residual claims against the Risky book are represented through senior and junior estate claims, and the risky portfolio is subject to auction-based price discovery rather than relying on going-concern marks.

Bond positions remain transferable through the terminal process, and Equity ranks last. The design removes the need to invent a claims hierarchy after distress has already occurred.