USDX is a stablecoin built on the Kava blockchain — a cross-chain DeFi platform offering collateralized loans and stablecoins to users of major crypto assets. ^[1][3]

Overview

USDX is a stablecoin pegged to the US Dollar. It has three primary use cases on the Kava network which are margin trading, hedging, and payments. Anyone can mint USDX by depositing their crypto assets into the protocol. USDX is minted when a Kava CDP (Collateralized Debt Position) is opened. ^[2][4]

The collateralization rate (assets must always be overcollateralized) is determined by the risk profile associated with the various assets and the exact value of USDX is determined by market forces. Rewards in Kava are distributed proportionally every week to users who mint USDX. ^[1][2]

The USDX stablecoin denominates the borrow balances drawn from the Kava lending platform. A user can supply BTC or other cryptocurrencies to Kava, borrow USDX, and exchange that USDX for other assets, goods, or services. Once the USDX is repaid to Kava, the user regains full access to their supplied BTC. ^[2][3]

Kava

Kava is a DeFi platform that utilizes Interledger to integrate various blockchain networks, which allows new users to access this group of different networks. Through Kava, a wallet user can send payments cross-chain and complete asset swaps right within the wallet. To provide its services, Kava utilizes the USDX stablecoin alongside the KAVA staking token, which is used for voting and governance. ^[3]

In addition, exchanges can likewise use 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 allows for the nearly instantaneous swap of cryptocurrencies, even those based on different blockchains. ^[3][5]