Kava (KAVA) Research

Kava (KAVA) Research Details

Kava (KAVA) Kava

INTRODUCTION

Kava (KAVA) is a DeFi lending platform that allows people to borrow and lend various cryptocurrencies without the need of banking institutions or other intermediaries. Kava is a decentralized initiative and one of the most famous in the DeFi market. Kava, unlike many other similar software protocols and DeFi systems, is not developed on top of the Ethereum network.

Cosmos serves as the foundational base for Kava, which supports the lending protocol. The development team decided to adopt Cosmos because it allows for customization and compatibility, improving the functionality of the Kava protocol, whereas Ethereum has difficulty scaling decentralized applications and hosted protocols when the network is congested.


HISTORY AND FOUNDERS

Ruaridh O'Donnell, Brian Kerr, and Scott Stuart are the co-founders of Kava Labs, a for-profit foundation that created Kava in 2018. A public token sale for 6.5% of the total KAVA tokens was organized by the team. The team raised almost $3 million during the token sale, which was run on the Binance exchange.

The Cosmos platform officially launched the Kava lending protocol in August 2020, enabling BNB to be used as collateral for crypto loans denominated in USDX.

The current CEO of Kava Labs is Scott Stuart, a former professional poker player, and experienced businessman. From 2017 until 2021, Scott worked for Kava Labs as the Head of Product before succeeding Brian Kerras as CEO.


REASON TO BUILD THE PROJECT

The reason to build the Kava protocol was to let users able to borrow and lend cryptocurrency assets without the need for any mediator through the fusion of Cosmos and Ethereum, two of the most popular permissionless systems, into a single scalable network.

The network makes use of the efficiency and adaptability of Ethereum smart contracts and integrates it with the compatibility of the Cosmos SDK, driven by the lighting-fast Tendermint consensus algorithm.

With the application-specific blockchains stored on Cosmos, commonly referred to as "zones," Kava is capable of integrating with various platforms and protocols. Users can add a variety of tokens to the Kava blockchain using this method to lend and borrow them.


BASE OF PROJECT

·       Kava Mint- Users that deposit their tokens in Kava Mint can borrow up to 67% of the amount of the collateral to mint USDX. These borrowers are responsible for paying the loan's interest to the Kava protocol. As stability fees, the interest is paid out to USDX holders.

·       Kava Lend- Interledger technology, an open-source system created on the Cosmos blockchain and utilized by Kava Lend, is used to transfer payments across networks. By eliminating all intermediaries, transaction fees and transaction time are reduced.

·       Kava Swap- Trading for tokens on the Kava platform is made possible using Kava Swap, an AMM solution on the Kava blockchain. As a result, it receives liquidity through Kava Mint and Kava Lend.


USE CASE

The use cases of Kava token are:

·       It protects the network using validators that stake the coin in exchange for block rewards and transaction fees. Additionally, the burning of stability fees paid by CDP users benefits the holders. These validators include many of Kava's public partners.

·       Stabilizes USDX peg. The coin is produced every time whenever the USDX-fiat peg is lost.

·       Governance since KAVA holders decide which ideas can be included and which criteria can be used to drive CDPs and loans. Holders, who have the option to give their voting authority to validators or exercise it independently, decide on stability fees, the over-collateralization ratio, and the acceptance of particular assets.


MAJOR NEWS AND EVENTS

DATE

NEWS/EVENTS

IMPACT

17/03/2022

Kava announces a $750 million developer incentive program

+20% Increase

 

16/11/2019

The KAVA mainnet has finally gone live, "making DeFi on Cosmos a reality"

+32% Increase

 


CONCLUSION

Kava provides simple and smooth lending and borrowing based on the protocol's support for a wide range of cryptocurrencies. Users can benefit from cross-chain lending and staking due to a simple and user-friendly collateralization scheme.

Users can benefit from the funds they stake for loans and receive an APY based on their investments. Users may easily use a multi-currency lending platform in a decentralized system that rewards the ability to borrow and lend cryptocurrencies.


DISCLAIMER

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto products are currently unregulated and subject to market risk. Please seek independent financial advice or do your own research before investing.