Katana to Fund KAT Buybacks With 50% of DEX Revenue From Nov. 17

Katana, a DeFi-focused Layer 2 blockchain, will channel revenue from four on-chain sources into open-market KAT buybacks, with all purchased tokens distributed to holders of its avKAT staking token. The Katana Foundation set the plan out in a Nov. 11 update, which also scheduled the retirement of vKAT emissions voting and a shorter withdrawal cooldown for Nov. 17. CEO Matthew Fisher said buyback purchases would begin later this year, initially on a set schedule, with fully automated on-chain execution to follow once security and engineering work concludes.

The foundation earmarked a different share of each revenue stream for buybacks, according to its Nov. 11 update:

• Katana Swap: 50% of revenue
• Katana Perps: 5% of revenue
• Vault Bridge: 5% of revenue
• Sequencer fees: 30% of revenue

Each percentage applies only to its own stream. The allocations are planned, not realized purchases, and the foundation framed them as revenue-routing rather than a commitment to spend all chain income on the token. "The goal isn't to guarantee higher returns," the foundation wrote. Purchase size will depend on actual protocol usage and revenue.

What changed on the acquisition side?

Katana disclosed in the same release that it now owns the Sushi deployment on its network — not Sushi as a whole — alongside Vault Bridge. Those assets join IDEX, the perpetual-futures exchange Katana acquired in March. Financial terms were not disclosed.

Katana Swap launched Nov. 11 using the acquired Sushi contracts, which remain unchanged. IDEX powers Katana Perps. Vault Bridge lets users authorize bridged assets to earn yield through strategies on Ethereum. Sequencer fees, paid to process transactions on the network, form the fourth revenue source.

How does staking change for holders?

Katana launched as a DeFi-focused Layer 2 in 2025. Its existing system lets users lock KAT into vKAT and vote on which markets receive token incentives. avKAT already automates that voting and compounds rewards, so automatic compounding itself is not new.

The Nov. 17 update removes the voting layer and broadens the revenue base. The foundation said avKAT previously earned primarily from Sushi fees routed through vKAT voting. From Nov. 17, vKAT stops earning voting fees and incentives, and holders must convert to avKAT to keep receiving staking rewards.

The unstaking cooldown falls from 45 days to seven on the same date. Waiting the full seven days avoids the protocol exit fee; immediate withdrawal carries a 25% fee that declines during the cooldown window. Holders can instead sell avKAT for KAT on a decentralized exchange with liquidity, though the market rate may diverge from the protocol conversion rate, with trading fees and slippage applying. The shorter cooldown improves access to underlying KAT; it does not guarantee an immediate sale at any particular price.

All tokens bought under the program will go to avKAT stakers and compound automatically each reward period. Existing avKAT holders need take no action, and the underlying KAT token is unchanged. The foundation's staking guide says vKAT can be converted before or after Nov. 17, with no conversion deadline; positions left in vKAT simply stop earning when the voting system closes.

The structural shift consolidates Katana's incentive machinery around a single auto-compounding instrument funded by four operating revenue lines. The immediate test arrives Nov. 17, when vKAT voting ends, the seven-day cooldown takes effect and remaining holders must decide whether to convert.