Kava is a cross-chain DeFi platform offering collateralized loans and stablecoins to users of major crypto assets.  ^[1][2]

The platform gathered the support of many significant players inside the crypto ecosystem, including projects like Cosmos and Ripple, and hedge funds, for example, Arrington Capital.^[3][4]  

To provide its services, Kava utilizes the USDX stablecoin alongside the KAVA staking token, which is used for voting and governance.^[5]

In November 2020, Kava partnered with Reef Finance, the leading DeFi (Decentralized Finance) project in the Polkadot ecosystem. According to the official blog, Reef will gain access to USDX stablecoins, Kava’s collateralized loans, Hard Protoco, and other high yield opportunities.^[6][7]  

Overview

Kava works by utilizing Interledger to integrate various blockchain networks, which permits new users to gain access to this group of different networks. Through Kava, a wallet user can send payments cross-chain and complete seamless asset swaps right within the wallet.

In addition, exchanges can likewise make use of the Kava solution to permit users to retain control over their blockchain resources while transacting directly with the exchange's order book. Kava's cryptocurrency swap application called Switch allows for the nearly instantaneous swap of cryptocurrencies, even those based on different blockchains.

Features

Decentralized loans and leverage: Kava provides the users of major cryptocurrencies with open access to loans, leverage, and stablecoins for hedging.

Stablecoin hedging with interest: Kava's USDX stablecoin can be bonded, providing holders of USDX with a yield.

Extensible synthetics and derivatives: Kava is capable of growing to support a wide range of new cryptocurrency assets and offering new synthetics and derivative products.

Kava is building up a stablecoin backed by Ripple, which will be utilized to power the collateralized debt positions (CDP) offered by Kava. Like Maker, the Kava platform will allow users to lock their cryptocurrencies into a CDP and get USDX stablecoins in return.

Kava utilizes Cosmos and operates with a Tendermint-based proof-of-stake (PoS) consensus mechanism. At its core, Kava relies on a system similar to MakerDAO with CDPs but leverages the zones from Cosmos to add cryptocurrencies running on independent networks (e.g., XRP, Bitcoin).^[8][9]  

In April 2020, Kava's testnet-5000 went live. Testnet-5000 supported BEP3, a protocol for securely transferring assets between Binance Chain and Kava via Atomic Swaps. ^[10]

In August 2020, Kava cooperated with the BNB investor club - BNB48. BNB48 Club will act as a technical consultant for the Kava community by providing professional product reviews and technical consulting services for Kava's Chinese validators, staking users, and lending platform users.

On August 13, 2020, the Kava team announced the strategic cooperation with Injective Labs, creators of Injective Protocol, the first Layer-2 derivative DEX platform. The cooperation will bring Kava’s lending facility and stablecoins to users of the Injective DEX. In addition, the integration will enable Kava and Injective Protocol to exchange ChainLink oracle data, services, and other on-chain and off-chain resources that will further enable the DEX its ability to offer derivatives products. ^[11]

In August 2020, Binance launched its DeFi staking program with Dai, the stablecoin generated by loans on MakerDAO, and Kava. The move means Kava users no longer need to interface with the Kava app but instead can go directly through Binance's DeFi staking portal. ^[12]

Kava web app supports borrowing USDX securely using Ledger Nano X and S devices. It also supports the Trust Wallet. ^[13]

In November 2020, Kava partnered with Reef Finance, the leading DeFi (Decentralized Finance) project in the Polkadot ecosystem. The cooperation will bring Kava’s collateralized loans, USDX stablecoins, Hard Protocol, and other yield opportunities to Reef users. Kava is the first project built with Cosmos SDK that will integrate with Reef’s platform. ^[14]

KAVA Token

The KAVA token is the KAVA blockchain's native token that assists with security, governance, and the mechanical functions on the platform. Validators are incentivized to be diligent in their work. The top 100 nodes validate blocks by a weighted bonded stake in KAVA tokens face losing KAVA if they work too slowly or begin double signing transactions, on the flipside they are rewarded in KAVA for doing a good job. KAVA is also used for proposals and voting on the most important parts of the platform such as critical parameters of the collateralized debt position (CDP) system, global debt limit of the system, types of supported collateral and their debt limits, collateral ratio, fees, and the savings rate for USDX. It also acts as a last resort system, functioning as a reserve currency in situations where the system is undercollateralized. When that happens, KAVA is minted and used to buy USDX off the market until it is overcollateralized again. ^[15]

USDX Token

The USDX stablecoin is pegged to the United States dollar. It has three primary use cases which are: margin trading, hedging and payments. Anyone can mint USDX by depositing their crypto assets into the protocol. The collateralization rate (assets must always be overcollateralized) is determined by the risk profile associated with the various assets. Rewards in KAVA are distributed proportionally every week to users who mint USDX. ^[16]

Investors

Kava Labs has received investment from firms including:

• HashKey Capital
• TRG Capital
• UniValues Associates
• Lemniscap
• Hard Yaka
• IOSG Ventures
• Digital Asset Capital Management
• 2020 Ventures
• Coil
• Arrington XRP Capital etc. ^[17]

Team

The Kava group has been at the platform since 2017. The CEO of Kava, and one of its prime supporters is Brian Kerr. After graduating from school, he founded Fnatic Gear, the primary organization making Esports equipment and clothing structured by Esports players for ESports fans.

The blockchain improvement lead, and a subsequent prime supporter of Kava, is Ruaridh O'Donnell. Subsequent to getting a Master's degree in Physics from the University of Glasgow in 2015 he invested energy as a designer and information investigator for Levelworks before serving to establish Kava. ^[18][19]