Popular Use Cases

Here are some use cases that Kairos will be able to support

• Yield Farmer:

  • A Pendle user could purchase yield token (YT) for a specific rate on Pendle and then use the YT as collateral in a Kairos market referencing the same rate to purchase a floating rate swap. The user would then have leveraged exposure to YT as they would receive both the yield from the YT as well as net the difference between the current YT rate and the fixed-rate of their swap.

• Mortgage Holder:

  • A homeowner may hold a mortgage with a fixed-rate of 6.5%. They believe rates will drop over the coming year so purchase a swap that lets them pay the floating rate and receive the fixed rate. Over the next year rates decline and the homeowner closes their swap at a profit and can then use the received funds towards their mortgage payments.

• Lenders:

  • If a lender offers a 10% fixed rate for two years via Morpho V2 while variable rates trade around 7%, they face interest rate risk if market conditions change. Should rates rise to 11% one year later, the lender continues earning 10% while new loans price at the higher market rate, causing the market value of their fixed-rate position to decline. Kairos enables lenders to hedge this exposure through interest rate swaps. Following the loan origination, a lender could enter a 2-year swap agreement, paying an ~8% fixed rate while receiving the variable rate tied to Morpho Market A. As rates increase to 11%, the loan continues generating 10% returns, but the swap produces a 3% profit. This mechanism allows lenders to capture rate increases without affecting borrower terms. Conversely, if rates decline, losses on the swap position would be offset by the increased market value of the above-market 10% fixed-rate loan.

• Digital Asset Treasury (DAT) Companies:

  • A DAT purchases a large amount of ETH and stakes it. The DAT could then use the liquid staking token as collateral in a Kairos market that references the ETH staking rate and lock in a fixed-yield payment for two years while paying the fluctuating stake rate. The DAT can subsequently issue fixed-rate bonds backed by this fixed-income stream, enabling it to purchase more ETH and providing investors with predictable ETH-denominated yield exposure.