Introduction
K2 is a decentralized borrowing and lending protocol deployed on Stellar's Soroban smart contract platform. It allows anyone to supply assets to earn interest, borrow against collateral, swap collateral positions, and execute flash loans — all in a transparent, non-custodial environment.
What K2 Does
Supply assets to earn variable interest (receive kTokens)
Borrow against collateral at market-driven rates
First institutional-grade lending protocol on Stellar
Withdraw your supplied assets plus all accrued interest
Flexible repayment with no lock-up periods
Composable with Stellar DEXes (Soroswap, Aquarius)
Swap collateral from one asset to another without withdrawing
Flash loans for capital-efficient operations
Audited smart contracts with multi-layer security
Why Stellar and Soroban?
Fast, deterministic finality. Stellar's consensus protocol closes a ledger every 3 to 5 seconds with immediate, irreversible finality. No re-orgs, no confirmation waiting. Without a public mempool, the window for transaction-ordering exploitation is dramatically smaller than on EVM chains, making classic front-running and sandwich attacks impractical in practice.
Low and predictable fees. Stellar's base fee is 0.00001 XLM, a fraction of a cent. Fees can rise slightly during congestion via surge pricing but remain negligible regardless, making it practical to interact with K2 as often as needed without cost becoming a barrier.
Purpose-built asset infrastructure. Soroban uses the SEP-41 token standard for fungible assets, analogous to ERC-20. K2 works directly with Stellar-native tokens including XLM and Circle-issued USDC without requiring bridges for core assets. Other supported assets may be bridged from other chains and carry the associated bridge risks.
Soroban: a safer smart contract environment. Soroban processes contract calls sequentially, preventing classic re-entrancy attacks by design — a vulnerability responsible for hundreds of millions in losses across EVM lending protocols. This is a structural guarantee, not a coding convention. Smart contract risk is never zero, but a significant attack surface present on other platforms is absent here.
Oracle integration. K2 uses RedStone as its primary on-chain price oracle for collateral valuation, with Reflector serving as a secondary source. Both are ecosystem-native oracle solutions on Stellar and Soroban, providing redundancy in price feeds rather than relying on a single source.
Protocol at a Glance
Architecture
Modular router pattern (Aave V3-inspired)
Supported Assets
USDC, XLM, PYUSD, SolvBTC, wBTC
Interest Rates
Variable, algorithmically determined by utilization
Oracle System
Multi-source (Primary: Redstone, Secondary: Reflector) with circuit breakers
Liquidation
Whitelisted during launch period, opens to permissionless over time
Security
Professional audits completed, all critical findings remediated
Network
Stellar
Last updated