Katana, a blockchain platform, is revolutionizing the use of bridged assets by deploying them into Ethereum lending protocols to generate yield, which is then reallocated as DeFi protocol incentives. Unlike traditional Layer 2 solutions that lock assets without utilizing them, Katana ensures that over 95% of its total value locked (TVL) is actively deployed in DeFi protocols, significantly higher than the typical 50-70% utilization rates of other chains. Katana employs three mechanisms to activate capital: the Vault Bridge, Chain-Owned Liquidity (CoL), and AUSD Treasury Yield. The Vault Bridge deploys assets into lending markets, while CoL reinvests transaction fee income into liquidity pools. AUSD, Katana's stablecoin, is backed by U.S. Treasury bonds, with off-chain yields enhancing liquidity pool incentives. This approach not only maximizes asset utilization but also provides a buffer against market volatility, ensuring stable operations and improved user experience.