CEX.IO Spotlight: Kava (KAVA) – Bitcoin & Crypto Trading Blog

Key Info: (July 15, 2022)

• Circulating Provide — 227,322,667 KAVA
• Whole Provide — 232,291,416 KAVA 
• Sector — DeFi lending
• Token Sort — Native token
• Token Utilization — Staking and governance
• Consensus Algorithm — Proof of Stake (PoS)
• Launch Date — October 2019 
• All-Time Excessive — $9.19
• All-Time Excessive Date — September 9, 2021

What’s Kava (KAVA)?

Kava (KAVA) is a DeFi software program that allows customers to lend or borrow a number of cryptocurrencies with out middlemen reminiscent of banks, monetary establishments, or different third events. Growing demand for DeFi companies makes KAVA a major mission with excellent know-how and a easy use case.

Being decentralized, Kava is among the many most outstanding tasks within the DeFi sector. Versus quite a few comparable protocols and DeFi platforms, Kava isn’t constructed on the Ethereum community. As a substitute, it implements Cosmos as a basic platform that backs up the lending protocol. This community was chosen because it depends upon customization and interoperability, giving extra performance to the protocol. Ethereum, then again, encounters issues with scaling dApps and hosted protocols if community congestion occurs.

The Kava system employs Cosmos so as to mint a stablecoin known as USDX that’s pinned to the U.S. Greenback. Each time a person deposits a cryptocurrency as collateral, USDX is made so different customers are capable of take loans within the form of USDX. Those that deposit their funds again to the lending system are given KAVA cash each week as a reward for his or her participation. 

Kava merges with different protocols and platforms through app-specific blockchain known as zones, that are hosted on Cosmos. This manner, customers are in a position so as to add a number of tokens to the Kava protocol that can be utilized for lending or borrowing.

A quick historical past of Kava

Kava was designed in 2018 by Kava Labs, a worthwhile basis co-founded by Scott Stuart, Brian Kerr, and Ruaridh O’Donnell. The staff threw a public sale for six.5% of your complete provide of KAVA, having raised about $3 million. 

In August 2020, the Kava protocol was formally launched on the Cosmos platform, granting BNB as collateral for USDX loans. Ever since, Kava has documented greater than $8 million value of USDX loans, in addition to round $24 million in BNB locked as collateral. 

What makes Kava distinctive?

Kava isn’t a single lending protocol within the DeFi sector. Nonetheless, its uniqueness is because of cross-chain operations and interoperability simplified through the Cosmos community on which the protocol is hosted. Owing to zones, a characteristic of Cosmos, Kava lending protocol customers are capable of deposit an intensive vary of non-native cryptocurrencies like bitcoin (BTC), BNB, Ethereum (ETH), and different cryptocurrencies.

One other characteristic that makes KAVA distinctive is enabling customers to reap a proportion yield on the idea of the system by which new USDX is minted. Customers are capable of earn curiosity whereas Kava secures crypto they’ve deposited. Additionally, these deposited funds contribute to the Kava market known as HARD Protocol.

What provides KAVA worth?

The worth of Kava is established by the steadiness and relevance of its use case, normal use, know-how, and technical capability. The basic worth of Kava instantly will depend on its know-how and repair. 

Since KAVA’s worth is instantly impacted by the volatility of the crypto market, it may possibly oscillate significantly inside quick intervals of time. The value may be influenced by the event staff, updates and upgrades, new options, mergers and partnerships. Within the case of KAVA, the worth may be additionally affected by including backup for extra cryptocurrencies. 

What number of KAVA are in circulation?

On the time of writing, there are 227,322,667 KAVA cash in circulation. The entire variety of KAVA isn’t capped so as to pay for staking rewards. For that purpose, KAVA is alleged to be an inflationary cryptocurrency, which means that its provide grows with time. 

The annual inflation charge varies from the underside of three%, when loads of KAVA are staked, to the highest charge of 20% when a small variety of cash are staked.

What’s KAVA used for?

KAVA is the native token of the platform with a twin goal. It’s carried out as a governance token for voting on the community and for staking. Thus, KAVA holders personal the Kava protocol, along with voting rights on the system. Expectedly, their voting energy will depend on the variety of KAVA cash they possess. 

The holders even have an opportunity to own their very own staking nodes; nonetheless, solely 100 nodes are capable of reap rewards as validators instantly from the protocol. 

Being an inflationary token, KAVA’s whole provide is limitless. Nonetheless, the system regulates it by the occasional burning of KAVA. 

How does Kava work?

The Kava lending protocol will depend on the efficiency of the good contract employed by the protocol to make a P2P lending system less complicated. Customers are capable of lock their funds in good contracts. In consequence, new USDX tokens are minted, which may be additional used for collateral loans. 

Subsequent, a particular good contract is routinely created. It pins the worth of USDX to that of the U.S. Greenback to compensate for volatility typical for the crypto market. This is called a collateralized debt place (CDP).

Customers have the chance to create CDPs by depositing crypto into good contracts by implementing digital wallets which may be linked with the system. As quickly because the funds are deposited, Kava will instantly lock them in a sensible contract. New USDX stablecoins are then minted on the idea of the deposited funds, permitting customers to take out loans in USDX. 

To finish the CDP and reclaim the collateralized token, customers should pay their debt again together with a lending price. When the CDP is finalized, the unique collateral is deposited again to the person’s pockets and Kava “burns”, that’s, destroys the lent USDX. 

To be able to defend the protocol from crypto volatility, the Kava system leans on the collateralization ratio. This manner, it additionally makes certain that USDX is over-collateralized to combat the devaluation of the collateral. 

Supply: Medium

What know-how does Kava use?

Kava is constructed across the Cosmos SDK, which is a modular blockchain improvement framework. It implements the Tendermint-based proof of stake (PoS) consensus mechanism that gives Byzantine Fault Tolerance, security, safety, and fast finality. 

Kava’s PoS consensus mechanism employs a community of validator nodes to substantiate transactions. These nodes have to supply collateral to begin validating transactions. In case a validator misbehaves or doesn’t handle to satisfy strict minimal necessities, their stake shall be punished. This manner, validators are motivated to remain sincere and environment friendly. 

KAVA holders are capable of run a staking node instantly from the protocol and thus reap staking rewards. Solely validators (the highest 100 nodes) can earn these rewards. Different KAVA holders are capable of stake their cash on numerous platforms, CEX.IO being one in every of them. 

The platform’s good contracts have been checked and audited by a number of unbiased crypto and blockchain safety firms. No vulnerabilities have been found updated. 

Kava governance

The Kava DAO is a decentralized autonomous group (DAO) controlling the Kava community. KAVA validators and stakers assist safe and run the community. Thus, they’re answerable for proposing and voting on proposals concerning the community. 

Kava Rivals

The Kava community undoubtedly provides high-quality lending companies, nonetheless, it isn’t the one crypto lending platform. These are a few of Kava’s most important opponents.

mStable

mStable is an open-source decentralized protocol that merges stablecoins, lending, and swapping right into a single customary. With its autonomous and non-custodial stablecoin infrastructure, mStable blends lending income with buying and selling charges to give you larger yield property. The protocol is managed by MTA holders who stake their cash so as to vote on proposals. 

Yearn

Yearn Finance is a sequence of DeFi merchandise that provides lending aggregation, yield era, and insurance coverage on the Ethereum community. The protocol is managed by totally different unbiased builders and managed by YFI holders. The preliminary Yearn product was a lending aggregator. Customers are capable of deposit to loans aggregator good contracts by means of the Earn web page. 

SushiSwap

SushiSwap is a decentralized crypto alternate platform that allows customers to swap, stack yields, earn, lend, and borrow on a single community-driven platform. Sushi holders can participate in group governance and stake their tokens to get part of SushiSwap transaction charges.

The place to study KAVA

To study extra concerning the Kava community, you may go to:

KAVA updates

Kava sticks to protecting its customers updated with all important occasions. These are a number of the newest updates:

• Kava Rise implementation — Kava Rise is a $750 million motivation program created to maintain onboarding essentially the most modern builders.
• Kava Earn introduction — Kava Earn was created with the purpose of simplifying complicated DeFi options.
• Kava 10 mainnet launch introduces Kava’s EVM, an enormous development of Kava’s Ethereum and Cosmos co-chains, connecting two massive ecosystems in a single community.

To expertise KAVA, purchase or deposit it on the CEX.IO net or cell platform.