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Project Research Dossier Kerne Protocol

By NEO

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Kerne Protocol — Pre-TGE Synthetic Dollar on Base

Research date: September 28, 2026 Research approach: Primary-source due diligence

  1. Project Goal

Kerne Protocol is a Base-based synthetic-dollar protocol.

It issues kUSD, minted 1:1 from USDC through an on-chain Peg Stability Module, and skUSD, an ERC-4626 wrapper intended to earn yield.

The stated strategy combines Ethereum staking rewards with perpetual-futures funding payments through a delta-neutral hedge. Kerne’s public GitHub states that the Hyperliquid hedge engine is built and wired, but no hedge position is currently open. The protocol is therefore currently operating as a fully USDC-reserved dollar while the hedge book is being seeded.

  1. Tokenomics

Kerne has a fixed 1,000,000,000 KERNE supply, with no inflation mechanism or minter.

Allocation Share Intended Schedule Team 20% 4y linear, 1y cliff Investors 15% 2y linear, 6m cliff Ecosystem / Liquidity 25% esKERNE / grants Treasury 15% DAO-governed unlock Community / Opal 5% 50% TGE, 50% over 6m Protocol-owned Liquidity 5% Intended locked at TGE Public Sale / TGE 5% Planned liquid at TGE Catalyst / Liquidity Reserve 10% Safe-controlled

A key distinction is that these published allocations are currently policy commitments rather than fully deployed vesting infrastructure.

The full 1B supply is held by a 2-of-3 governance Safe. No vesting contracts are deployed, while the esKERNE contract is deployed but unfunded.

  1. FDV, Unlock and Dilution Risk

With a fixed 1B supply:

$0.05 → $50M FDV $0.10 → $100M FDV $0.25 → $250M FDV $0.50 → $500M FDV $1.00 → $1B FDV

These are illustrative calculations, not price forecasts.

The main dilution risk comes from future circulation of currently non-circulating allocations rather than inflation. Team and Investor allocations together represent 35% of total supply, while Ecosystem / Liquidity represents another 25%.

The key diligence point is whether the published vesting schedules become technically enforced before TGE.

  1. Team Verification Signals

Kerne identifies three co-founders. Independent verification signals include:

Public Solidity repositories Verified Base contracts Public deployment registry Reproducible verification scripts Publicly runnable tests External Hexens security audit 5. Key Risks

Technical: Hexens reviewed five contracts and reported 0 critical, 2 high, 2 medium, 4 low and 2 informational findings. Eight findings were fixed and two acknowledged.

Deployed-code: Kerne states that the live KerneVault was deployed from an earlier commit than the audited source, with deposits closed while remediation is handled.

Execution: The intended yield strategy depends on funding conditions and the Hyperliquid hedge. The hedge position is currently not open.

Governance: The protocol currently relies on a 2-of-3 Safe and a 48-hour Timelock for specified contracts. Full DAO governance is described as planned rather than already established.

Organizational: Kerne’s public underwriting memo states that the team consists of three people and has no legal entity.

  1. Public-Raise Check

The reviewed primary sources show a Genesis Window that closed on August 5, 2026, with a stated $250,000 cap and $1,145 kUSD supply at close. The documentation describes this as a protocol deposit window rather than a KERNE token sale.

  1. Disclosure

[EDIT BEFORE SUBMISSION]

State whether you hold KERNE, have received Kerne-related incentives, or have no position/incentives.

This dossier is educational due diligence and is not financial advice.

Primary Sources

[1] Kerne Whitepaper — https://kerne.fi/whitepaper [2] Kerne Public GitHub — https://github.com/kerne-protocol [3] Kerne Security / Hexens Audit — https://kerne.fi/security/audits [4] Kerne Public Underwriting Memo — https://github.com/kerne-protocol/contracts-public/blob/main/underwriting/kusd-underwriting-memo-2026-08-08.md