Kava is a blockchain and a DeFi lending platform established in 2018. It is built on Cosmos, an ecosystem of blockchains, and allows users to deposit, borrow and lend cryptocurrencies without involving a traditional financial intermediary. It embraces coins from multiple blockchains as collateral. The Kava team is focused on making transparent financial services accessible to everyone anywhere in the world.
The Kava blockchain has been developed by Kava Labs. It is backed by Framework Ventures and Arrington XRP Capital as investors and several major exchanges, including Binance, Huobi and OKEx, that are involved in its governance. The insurance pool CertiKShield allows Kava to seek reimbursements of lost tokens. Kava uses a Proof-of-Stake (POS) mechanism to secure the network. Its smart contracts have been audited for vulnerability by such firms as CertiK, B-Harvest and Quantstamp.
The Kava blockchain native assets include KAVA, HARD, and USDX. HARD is a token that users receive as a reward for lending and borrowing on the HARD Protocol, the cross-chain money market built on the Kava blockchain that offers lending, borrowing and yield on BTC, XRP, and BNB. KAVA is a governance token also used as a staking asset, which ensures the safety of loans on the protocol.
The Kava network is based on its native decentralized stablecoin USDX, pegged to the US dollar. Through Kava, users can borrow USDX tokens by depositing such digital assets as BTC, XRP, and ATOM as collateral. The platform uses a collateralized debt position (CDP) system to ensure that loans are properly collateralized. If a borrower is unable to maintain their collateral above the required threshold, Kava withdraws and sends it to the auction module for sale. Users can borrow up to 67% of their locked balances’ value. Interest is allocated among USDX holders in the form of stability commissions with a net income of 4.5% per annum.
Kava allows users to issue loans in USDX to themselves. This does not require a counterparty or credit rating. Users can also generate income from USDX minting. They can deposit newly minted coins into Hard Protocol, the Kava money market, and earn variable APYs while their collateral remains secured by Kava. The USDX coin can be traded on exchanges like BitMax.
The Kava ecosystem is powered by its native token KAVA based on an ERC20 token standard. This is a utility token used throughout the chain as a store of value and as a reserve currency in case of insufficient system collateralization. KAVA holders are able to govern the system by voting on the rules of the protocol.
The KAVA token was launched in late 2019 after several private sales and an initial exchange offering (IEO) on Binance. The tokens were distributed in the following way: 6.52% of the total supply was sold through a public sale on Binance Launchpad, 40% of KAVA was sold to private sale investors, 25% was allocated among Kava Labs shareholders, 28.48% of the funds intended for ecosystem development went to Kava Treasury.
KAVA is an inflationary token, so its maximum supply increases by 3%-20% every year. depending on the amount of staked KAVA tokens and if there is a need to mint new coins. If the value of locked balances falls, KAVA is minted and sold at auction to raise funds.
KAVA can be stored in any Ethereum compatible wallet like Swipe Wallet or a hardware wallet Ledger Nano S. Cosmos Hub wallet Lunie.io and Binance’s Trust Wallet support KAVA’s storage, transfer, staking, and lending. It can be traded on a wide range of exchange platforms including Binance, Kraken, Huobi Global, Gate.io, Upbit, and CoinEx against USDT, BTC, BUSD, USD, EUR, BNB, ETH, XBT, and other assets.
KAVA holders have several options to earn staking rewards. The first is to deposit your coins at a staking service, for example, an exchange that supports KAVA like Binance or Huobi Pool. Payouts depend on the exchange and can range from 50% to 100%. Another option is delegating, or binding your tokens to a validator, which allows earning 80–100% of rewards. Users can also become blockchain validators and run their own staking nodes earning 100% of rewards. Anyone with the necessary hardware can run a node but only the top 100 validators are eligible for staking rewards.
Users can receive KAVA every week as a reward for minting USDX coins. The bounty is determined by the type of collateral and the amount of USDX a user mints. KAVA Rewards are valid for 21 days.
Kava team and partners
The Kava team is a globally distributed bunch of blockchain and cryptocurrency professionals striving to create efficient technologies for the future. Kava Labs was co-founded by Brian Kerr, Ruaridh O'Donnell and Scott Stuart. Brian Kerr is the CEO of the platform who was also the founder and CEO at Fnatic Gear, the company making Esports hardware and apparel. Scott Stuart, a former professional poker player, works as a product manager at Kava.
Kava Labs also includes other employees among which are Denali Marsh, an blockchain engineer, Maryna Romanova, a marketing manager, Rohan Sheth, a product manager, Nicholas DeLuca and Paul Downing, experienced software engineers, and Aaron Choi, Vice President of Global Business Development.
Kava has established strategic cooperations with PlasmaPay, a DeFi payment and remittance platform, Reef Finance, a DeFi project in the Polkadot ecosystem, BNB investor club, the crypto media website BTCManager, fiat-to-crypto provider Simplex, Commun, a blockchain-based social media platform, and Tendermint, the creator of the Cosmos Hub and consensus engine that drives the Cosmos ecosystem.