# What is kai?

*Kai represents the latest innovation in the DeFi yield optimization space, functioning as a tertiary layer in the existing Balancer and Aura ecosystem. It's designed to build upon the yield strategies initiated by Aura for Balancer liquidity providers, further enhancing the incentive mechanisms and governance participation.*

<figure><img src="/files/hia7gzo3xwD46Eg03iNx" alt="" width="375"><figcaption></figcaption></figure>

### **Yield Optimization and Layering:**

Kai introduces an additional layer of yield optimization atop Aura's existing Balancer boost. By participating in Kai, users can leverage their Aura engagement to access enhanced rewards, compounding their yield potential. This is achieved through building on top of the existing infrastructure that maximizes the utility of underlying Balancer LP tokens and Aura rewards.

<figure><img src="/files/C9phRjmJYQkrv3PftnK6" alt="" width="563"><figcaption></figcaption></figure>

### **Governance Tokenomics and Meta-Governance:**

Kai introduces its native governance token, serving dual purposes. It acts as a vehicle for reward distribution and as a means for governance participation. Token holders can influence Kai's protocol decisions, and by extension, wield direct influence over Aura's governance decisions, leveraging a meta-governance framework and further balancer decentralization. Aura's growth of veBal is unmatched.&#x20;

Kai aims to synergize with Aura and Balancer's liquidity pools, enhancing overall capital efficiency. This is achieved by optimizing the allocation of liquidity across existing pools thereby maximizing yield for liquidity providers, and distributing governance across users.&#x20;

Kai is a strategic enhancement to the DeFi ecosystem that leverages existing protocol building blocks to offer stacking of sophisticated yield strategies. By participating in kai, users engage in a precise ecosystem offering thrice-compounded yield opportunities, and a commitment veBal / vlAura decentralization.&#x20;


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