kTokens

Collateral tokens generated by Keom

When crypto assets are supplied one of the markets, corresponding kTokens are automatically minted by the protocol and sent to the supplier’s wallet (eg. supplying ETH result in minting of kETH). kTokens then effectively become the collateral.

kTokens are the tokenised representations of each user's share on the market along with the accrued interest.

Though kTokens are representative of the underlying asset, they do not possess a 1:1 exchange rate with it (1 USDC is not equal to 1 kUSDC). Whenever a user mints, redeems, borrows, repays, liquidates an account, or transfers kTokens, they are doing so through an interaction with the relevant kToken contract.

By holding an kToken for one second or longer, the custodian automatically earns interest paid by borrowers of the supplied asset. This is manifested by an increase in the value of the kToken against its corresponding underlying asset. Even while the number of kTokens in a user's wallet stays the same, the quantity of the asset they can be redeemed for increases over time.

kToken are visible on any block explorer. Since they follow the ERC20 standard, they are transferable like any other standard token. Transfers of kTokens that would result in the user's account entering an undercollateralised state will fail.