Katana Network Addresses DeFi Structural Issues with Controlled Liquidity

Katana is an Ethereum Layer 2 network that aims to revolutionize the decentralized finance (DeFi) space. Developed by Polygon Labs in collaboration with GSR, the network was introduced in 2025 as a solution to address structural issues in DeFi.

The project operates with a unique structure that concentrates liquidity within a smaller ecosystem, allowing for streamlined user activity and improved capital efficiency. Core integrations include platforms for trading and lending, which help to facilitate user interaction and increase the overall effectiveness of the network.

Katana's native utility token, KAT, plays a crucial role in the functioning of the network. Primarily used for staking, KAT also enables users to manage incentive distribution across the network. In return, participants receive a share of fees generated by network activity.