Kitty Finance is an algorithmic stablecoin on Avalanche, pegged to the price of 1 AVAX via seigniorage. The KITTY algorithmic token serves as the backbone of a rapidly growing ecosystem aimed towards bringing liquidity and new use cases to the AVAX network.

The protocol's underlying mechanism dynamically adjusts KITTY's supply, pushing its price up or down relative to the price of AVAX. Unlike previous algorithmic tokens, KITTY is not pegged to a stable coin— it is instead pegged to $AVAX. Because of AVAX high per coin price, we have decided to peg KITTY to AVAX at a 1:1 ratio. In other words, 1 KITTY should equal 1 AVAX for our PEG to be maintained.

One of the primary shortcomings of past algorithmic tokens has been a lack of use cases, leaving no good reason for somebody to want to use or hold them. In order to successfully maintain the peg in the long run, the KITTY team will maintain a focus on innovation around enhanced functionality and use cases.