Liquid kUSD
The senior claim, and what pays it
Liquid kUSD is the senior, transferable claim on the balance sheet. It earns the Hazard rate that the Bond book pays for the capacity it uses, and it carries no asset exposure.
Liquid kUSD is the senior claim on a Syncratix balance sheet: a spendable, transferable dollar instrument that ranks ahead of Bonds and Equity, earns the Hazard rate paid by the Bond book, and is exposed to loss only after both junior layers are exhausted.
A conventional design gives a holder one of two things. A fully reserved instrument preserves straightforward backing but the return on the Reserve accrues to the issuer. A return-bearing instrument passes economic return to the holder, and generally passes through the investment exposure used to generate it as well.
Liquid kUSD separates them. The holder receives a return and does not receive the exposure.
Where the return comes from
Bond holders use balance-sheet capacity to carry a leveraged risk position, and they are charged for that capacity through the Hazard rate. Hazard accrues daily against the Bond book and is credited to liquid holders. Its level is formulaic rather than negotiated, and it responds to the term-weighted risk state of the Bond book.
So the payment to a liquid holder is a fee for capacity, funded by the layer that uses it. It is not a share of investment return, and it does not vary with how the risk book performs.
Where it ranks
First. Losses are allocated to Equity, then to the Bond book, and reach the liquid layer last and least. That order is encoded in the settlement mechanics rather than left to an issuer’s decision after an adverse event.
Entry, and why the price moves
Issuance is priced according to the state of the balance sheet rather than at a fixed par. The risk ratio is the risky half of the Bond book measured against the Reserve, and it is the single state variable the entry price responds to. At zero deployed risk the price is par; as Bond capital grows relative to the Reserve, the price rises with it.
A deposit adds to the Reserve, so it lowers the ratio as it fills. The price falls across the deposit’s own path, and the depositor pays the average across that path rather than the price it opened at.
Exit
There is no redemption mechanism into the reserve asset during the normal course of business. The Reserve is backing, not a redemption window, and exit is the secondary market. Convertibility is a configuration axis: an issuer may specify redemption functionality separately when configuring an instance.