Lucid-Kite AI

Kite Integration with Lucid - Native yield-generating USDC liquidity for the Kite ecosystem

Lucid has integrated with Kite to bring native yield-generating stablecoin liquidity (USDC) to the Kite ecosystem. This integration enables developers, apps, and ecosystem partners to use canonical, cross-chain stablecoins that automatically generate yield while remaining fully redeemable across supported networks.

Lucid's Native Yield Layer for Stablecoin Liquidity

Lucid's Kite is a native yield layer for stablecoin liquidity that transforms idle USDC into yield-bearing assets without changing their usability. Kite introduces L-USDC, a bridge-agnostic, yield-generating version of USDC designed to operate seamlessly across chains.

This integration provides ecosystems with a canonical stablecoin layer that works from day one—without fragmentation or custom bridge logic, a unified stablecoin primitive for cross-chain apps, DeFi protocols, and infrastructure partners building on Kite.

High-Level Architecture

Kite consists of four core components:

1. Lock Contracts

Each Kite asset has a dedicated lock contract that holds native USDC on a selected lock chain.

• Default lock chains:

  • USDC → Arbitrum

• Configurable per ecosystem or deployment

• Manages collateral custody, withdrawals, and yield deposits

• Supports isolated pools for custom deployments

2. Yield Layer

• 90% of collateral is deposited into Aave v3 to generate yield

• 10% remains on-chain as an immediate withdrawal buffer

• Automated rebalancing maintains buffer thresholds

• Supports future expansion to additional money markets

• Optional isolated strategies for ecosystems requiring custom risk profiles

3. Mint & Burn System

• L-USDC is minted and burned via Lucid's multi-bridge routing architecture

• Supports all major bridge ecosystems

• Minting occurs once collateral reaches the lock chain

• Burning releases collateral back to the user via routed settlement

4. Multi-Hop Routing Engine

• Enables single-flow transactions across multiple bridges

• Users can start on any supported chain and mint L-stables on their target chain

• Eliminates the need for direct canonical bridge paths

• Improves UX and liquidity accessibility across fragmented ecosystems

Liquidity & Risk Management

Liquidity Buffer

• Maintains a minimum 10% on-chain buffer for immediate redemptions

Automated Rebalancing

• Continuously rebalances between Aave and lock contracts

• Ensures buffer availability while maximizing capital efficiency

Just-In-Time Liquidity

• If withdrawals exceed buffer capacity, liquidity is pulled from Aave automatically

• Settles within standard bridge timelines

Utilization Monitoring

• Monitors Aave pool utilization in real time

• Dynamically increases buffer size during high-stress periods

Minting & Redemption Flow

Minting

1. User sends USDC on any supported chain

2. Multi-hop routing moves funds to the lock chain

3. Lock contract registers collateral

4. L-USDC is minted on the destination chain

5. Yield generation begins automatically

Redemption

1. User burns L-USDC

2. Collateral is released from the lock contract

3. JIT liquidity is used if buffer is insufficient

4. Native stablecoin is routed back to the user

Security & Audits

• Audited smart contracts

• Lock contracts, mint/burn controllers, and yield logic audited by Halborn

• Continuous monitoring and operational safeguards

• Designed for institutional-grade deployments

Controller Contracts for Kite

KiteAI (chain id: 2366)

USDC

• Controller: 0x92E2391d0836e10b9e5EAB5d56BfC286Fadec25b

• Deployed Chains: Avalanche, KiteAI

• Activated bridge adapters: LayerZero

• Token on Avalanche: 0xb97ef9ef8734c71904d8002f8b6bc66dd9c48a6e

• Token on KiteAI: 0x7aB6f3ed87C42eF0aDb67Ed95090f8bF5240149e

WETH

• Controller: 0x638d1c70c7b047b192eB88657B411F84fAc74681

• Deployed Chains: Avalanche, KiteAI

• Activated bridge adapters: LayerZero

• Token on Avalanche: 0x49D5c2BdFfac6CE2BFdB6640F4F80f226bc10bAB

• Token on KiteAI: 0x3D66d6c3201190952e8EA973F59c4428b32D5F9b

For technical details, please visit Lucid Labs documentation.

Summary

Kite brings yield-generating, bridge-agnostic stablecoins to the Kite ecosystem through Lucid's infrastructure. With automated liquidity management, multi-hop routing, isolated deployment support, and audited smart contracts, Kite provides a production-ready stablecoin layer for developers, protocols, and ecosystem partners building cross-chain applications.