In Katana, cross-chain assets like ETH, USDC, USDT, WBTC, etc., won’t just sit idle on the chain. Instead, they’ll be used in relatively low-risk financial strategies, and the returns generated will be fed back into Katana’s core DeFi ecosystem. So, what are the vbTokens users receive? When you use VaultBridge on Katana, you’ll get vbUSDC, vbETH, vbWBTC, and similar vbTokens. vbTokens themselves don’t automatically increase in value. They’re not LSTs, and you can’t just sit back and earn interest. You need to put vbTokens to work, like using them for LP or lending, to enjoy the enhanced returns. The purpose of this design is to reward funds that actively participate in DeFi, rather than just sitting idle as cross-chain TVL. The returns are split into two layers: Layer 1: Katana deploys these assets into Morpho’s low-risk, high-liquidity Vaults. They only handle strategy and monitoring, without touching the funds. Layer 2: On Katana’s side, the profits earned on Ethereum will be periodically brought back by the Katana Foundation to subsidize Katana’s core applications. For example: Morpho (lending), Sushi (spot LP), and some chain-native liquidity scenarios. @katana @0xPolygon