Lending/Borrowing is an indispensable application in both traditional finance and decentralized finance. Kava was considered one of the emerging DeFi projects when it launched its IEO on Binance Launchpad in October 2019. The starting price was $0.46/KAVA and the price is now approaching $9/KAVA, which is impressive in terms of return on investment (ROI).
In this article, Coin98 will provide all the detailed information about Kava, including:
- What is Kava? How does it work?
- All the detailed information about KAVA Tokenomics and how to get, buy KAVA tokens.
- Roadmap, updates, team, investors, and partners.
- Is KAVA a good investment?
Let’s find out the potential behind Kava together!
What is Kava?
Kava is a blockchain built on Cosmos that has a lending protocol allowing users to borrow and lend crypto assets without the need for an intermediary. The platform operates as a decentralized hub for crypto assets offering users financial products like loans, stablecoins, and so on.
It has three main products:
- Kava Mint is a lending platform for users to deposit crypto as collateral to borrow Kava’s crypto-backed stablecoin, USDX. When doing so to mint USDX, users earn KAVA tokens weekly as rewards.
- Kava Lend (formerly Hard Protocol) is a lending product from KAVA where users can borrow not only USDX but also other cryptos such as BTC, BNB, BUSD, XRP, etc.
- KavaSwap: an AMM product built on the Kava blockchain which aims to connect liquidity from other blockchains such as Ethereum and BSC.
Overall, Kava is trying to build an ecosystem that is oriented towards competing with other existing blockchains.
See Also: How to use Kava
How does Kava work?
In Kava Mint, users who deposit their tokens as collateral can borrow up to 67% of the collateral value to mint USDX. Those borrowers have to pay the interest of the loans to the Kava protocol. The interest is distributed to USDX holders as stability fees.
In case the collateral value is below the minimum borrow ratio, it will be liquidated plus a 7.5% liquidation fee. The liquidated collateral will be auctioned then the balance will be transferred to the borrower.
The collateral debt position (CDP) is the core lending service of Kava that allows users to collateralize their crypto to borrow USDX. The module manages the process of CDP for loans, which is described in the following diagram.
Whenever a loan is liquidated, it will be put in an auction. In short, there are three types of auctions that make up the Auction module.
- Collateral auction: the winning bidder’s USDX will be used to pay for the debt from liquidation.
- Surplus auction: A small number of interest payments on debt is given to the protocol. That amount will be auctioned off for KAVA tokens. After that, the KAVA profit will be burnt to decrease the supply in order to increase the valuation.
- Debt auction: The bidder pays USDX to cover the debt and earn new KAVA tokens minted by the protocol. Therefore, it increases the supply, impacting the valuation.
On August 27th, 2021, Hard Protocol changed its name to Kava Lend, which marked a milestone for the Kava platform. Kava Lend uses Interledger technology introduced by Ripple Labs - a big partner of Kava.
Interledger is an open-source protocol built on the Cosmos blockchain that is used for sending payments across different networks. By removing every intermediary, it helps to reduce the transaction fees and time needed for transactions.
Kava Lend allows users to borrow different types of crypto assets such as BTC, BNB, BUSD, XRP, etc. Kava Lend’s governance token is the HARD token.
Kava Swap is an AMM product on the Kava blockchain that allows traders to swap for tokens on the Kava platform. Therefore, it inherits the liquidity from Kava Lend and Kava Mint. The SWP token is its governance token.
Furthermore, Kava Swap plans to be a cross-chain AMM that connects liquidity from Ethereum and BSC.
What is KAVA Token?
The KAVA token is the utility and governance token of the Kava blockchain. In short, KAVA holders have a strong voice in the KAVA platform.
On the platform, there are also other tokens built on the Kava blockchain for each DeFi product:
- Kava Lend has HARD as governance tokens.
- Kava Swap has SWP as governance tokens.
Detailed information about KAVA Token
KAVA Key Metrics
- Token Name: Kava.
- Ticker: KAVA.
- Blockchain: Kava blockchain.
- Token Standard: KAVA-10C.
- Token Type: Utility, Governance.
- Max Supply: 144,567,755 KAVA.
- Circulating Supply: 91,443,180 KAVA.
KAVA Token Allocation
The KAVA Token is distributed as follows:
- Private Sale 1: 30.05%.
- Private Sale 2: 5.02%.
- Private Sale 3: 4.93%.
- Binance Launchpad: 6.1%.
- Kava Labs Shareholders: 25%.
- Treasury: 28.48%.
KAVA Token Sale
KAVA Token Release Schedule
KAVA Token Use Case
On the Kava borrowing platform, there are lots of DeFi products to earn KAVA so that users can take advantage of KAVA in multiple ways, including:
- Tx Fees: It requires a small amount of KAVA as fees when conducting any transaction on the KAVA blockchain.
- Rewards: for delegators participating in the Kava blockchain operation.
- Governance: KAVA tokens are used to vote on adjusting CDP parameters.
How to get KAVA Token
You can get KAVA through multiple decentralized exchanges:
- CEXs: Binance, Huobi, FTX, Coinbase, etc.
- DEXs: Uniswap, Sushiswap, etc.
How to store KAVA Token
First you can create a Kava Wallet on Coin98 Wallet.
You can store, send, receive KAVA Tokens on Coin98 Wallet with a few single steps. The guides on how to make transactions with KAVA on Coin98 Wallet are as follows:
Step 1: Open Coin98 Wallet & click Receive on the home screen.
Step 2: Search KAVA Token.
Step 3: Click on the correct result, copy the wallet address and send KAVA to this address.
Roadmap & Updates
Team, Investors, and Partners
Brian Kerr is the founder and CEO of Kava Labs and Hard Protocol. Kava Labs is focusing on producing financial services and making them accessible to everyone. It first launched the Kava blockchain to build the foundation for DApps and DeFi services.
In Jan 2019, Kava raised a $1.2M fund from many investors: Lemniscap, Digital Asset Capital Management, Xpring of Ripple, Coil Technologies, 2020 Ventures, Arrington Capital, Hard Yaka, Robot Ventures, UniValues Associates,…
In April 2020, Kava with a 3.89% of total KAVA circulating supply raised a $750,000 fund from Framework Ventures. It is investing in the Kava network by staking KAVA tokens and running nodes.
Is Kava (KAVA) a good investment?
As time goes on, Kava Labs is developing and innovating more and more DeFi products to expand the ecosystem. On the journey, it has its own blockchain platform, many big partners, and a large community. There are some striking highlights from Coin98 for investment considerations:
- The KAVA blockchain is a huge advantage for development progress because it allows an unlimited number of ideas to deploy. And according to Kava Roadmap, they are completing the infrastructure and almost finishing every key component. Many are now expecting Kava to announce the next move.
- Similar to Terra, Kava closes its ecosystem and builds DeFi products on it first. This makes services from Kava have high quality but it affects the pace of ecosystem development.
- Kava Mint’s biggest opponent must be MakerDAO with 6.5B DAI tokens issued. As a result, there’s a big target for USDX to look forward to. So let’s imagine how big it will be if USDX catches up with DAI.
- Kava is going on the right track since Kava Lending and Kava Swap diversify the Kava ecosystem with various major tokens for lending and trading. In the future, what will be the next product of Kava, an NFT marketplace to catch the trend?
- Kava Labs is developing Robo Advisors that are responsible for managing and controlling the liquidity of the platform. It’s just a step in the roadmap, and like other emerging blockchains, Kava is expected to announce some incentive programs to ignite its ecosystem.
To summarize, the Kava blockchain is developing independently in the Cosmos ecosystem. And as usual, whether it is worth investing or not, Do Your Own Research before buying and be responsible for your investment.
Kava is a project built on the KAVA blockchain focusing on lending and swapping services, so it also has numerous large blockchains as competitors.
- Terra (LUNA) is the main opponent of Kava because they have many things in common such as issuing stablecoin, built on Cosmos.
- Liquity (LQTY) is a lending protocol built on the Ethereum blockchain that operates with a similar principle to Kava Mint. Users can deposit ETH as collateral to borrow LUSD.