Contents<\/p>
- 1<\/span> What is Kava.io?<\/a><\/li>
- 2<\/span> Kava.io in a Nutshell<\/a><\/li>
- 3<\/span> How Does Kava.io Work?<\/a>
- 3.1<\/span> Collateralization Ratio<\/a><\/li><\/ul><\/li>
- 4<\/span> The KAVA Token<\/a>
- 4.1<\/span> Security<\/a><\/li>
- 4.2<\/span> Staking Asset<\/a><\/li>
- 4.3<\/span> Last Resort Lender<\/a><\/li>
- 4.4<\/span> USDX-Kava.io<\/a><\/li>
- 4.5<\/span> Margin Trading\/ Leverage<\/a><\/li>
- 4.6<\/span> Hedging with Interest<\/a><\/li><\/ul><\/li>
- 5<\/span> Team Behind Kava.io<\/a><\/li>
- 6<\/span> Why Does Kava.io Have Value?<\/a><\/li>
- 7<\/span> What Makes Kava.io Unique?<\/a><\/li>
- 8<\/span> Why Use Kava.io?<\/a><\/li>
- 9<\/span> Modules Used In Kava.io Ecosystem<\/a>
- 9.1<\/span> Price-feed Module<\/a><\/li>
- 9.2<\/span> Auction Module<\/a><\/li>
- 9.3<\/span> Collateralized Debt Position(CDP) Module<\/a><\/li>
- 9.4<\/span> Liquidator Module<\/a><\/li><\/ul><\/li>
- 10<\/span> Kava.io Price Live Data<\/a><\/li>
- 11<\/span> Kava.io Review Conclusion<\/a><\/li><\/ul><\/div>\n
What is Kava.io?<\/span><\/h2>\n
KAVA is a protocol or software that allows users to lend or borrow assets with multiple cryptos without a traditional intermediary. It is a \u2018cross-chain lending platform in Defi that permits its members to borrow \u2019USDX\u2019 stable coins. They can also deposit varieties of cryptos to earn a yield. Kava.io protocol offers services that are similar to Maker DAO<\/a>.<\/p>\n
The protocol is recognized as one of the emerging Defi (Decentralized) projects. It runs on \u2018Cosmos\u2019 unlike most Defi projects that are Ethereum built.<\/p>\n
Running Kava.io on Cosmos is a design choice the Kava.io team argued will increase the functionality. Kava.io users must lock up their crypto assets into the ‘smart contracts’ on Cosmos before they can take loans in USDX.<\/p>\n
Kava.io Defi ecosystem for cryptos works like that of a decentralized bank giving users access to a variety of Defi services.\u00a0 It allows users to borrow its native stable coin USDX, synthetics as well as derivatives. The Kava.io protocol uses a CDP (collateralized debt position) system to make sure loans from stable coins are sufficiently collateralized always.<\/p>\n
The protocol liquidator module seizes and transfers collaterals of borrowers to the \u2018auction module\u2019 for sale. This happens only when they can not maintain the collateral above the standard threshold. Kava.io introduced a native token known as KAVA in addition to its USDX stable coin.<\/p>\n
KAVA token functions as Kava.io’s utility token. It serves as a \u2018reserve currency\u2019 when the platform is under collateralized. It is also a governance token for deciding on proposals in the system.<\/p>\n
Buy KAVA with Our Top Broker<\/span><\/a><\/div>\nKava.io in a Nutshell<\/span><\/h2>\n
In a nutshell, Kava.io increases the number of digital assets crypto users can borrow, including BTC, BNB, and XRP, among others. Users earn rewards weekly in the form of KAVA by collateralizing their cryptos to mint the USDX. The total volume of KAVA rewards depends on the amount and type of collateral the user minted.<\/p>\n
Kava.io aims at launching a Ripple-backed stable coin that will power its CDP (collateralized debt positions) like Maker DAO. The protocol is currently being supported by Cosmos, Ripple, and hedge funds like Arrington Capital. The Kava.io blockchain recently launched its mainnet.\u00a0 This blockchain is supposed to include various cryptocurrencies that are\u00a0 Cosmos based to increase the efficiency of DeFi services.<\/p>\n
How Does Kava.io Work?<\/span><\/h2>\n
Kava.io allows its network users to lock up their digital assets in \u2018smart contracts\u2019 and borrow the stable coin USDX. This creates a CDP (collateralized debt position) on the back-end.\u00a0 The locked digital assets now serve as collateral for the loan borrowed.<\/p>\n
Kava.io members are allowed access to many collateralized loans. This helps them to create ‘synthetic leverages’ for all the crypto assets supported by the system. E.g., users that locked up XRP or Bitcoin in the network will receive the equivalent amount in USDX that is newly minted. They can use this newly minted coin to buy more Bitcoin or XRP and gain leveraged position in the crypto market.<\/p>\n
Kava.io also combines a variety of community-built applications, which adds to its general user experience (UX). Users via this interoperability are enabled to access varieties of assets in hardware wallets.\u00a0 The process of using the Kava.io platform include;<\/p>\n
Deposit Cryptocurrency: <\/strong>Users connect their digital wallets to deposit their cryptos.<\/p>\n
Creat a CDP:<\/strong>\u00a0 The deposited cryptos are locked in a ‘smart contract.’<\/p>\n
Creat USDX:<\/strong> Users are given USDX loans equivalent to their CDP value.<\/p>\n
Close a CDP:<\/strong> Kava.io users pay back the loan plus a transaction fee to access the locked (collateralized) crypto.<\/p>\n
Withdraw Crypto:<\/strong> Kava.io initiates USDX burning once the collateralized crypto is taken by the user.<\/p>\n
Collateralization Ratio<\/strong><\/span><\/h3>\n
This is a mechanism that protects the network from volatility that can reduce the borrower’s collateral value. USDX on Kava.io is usually over-collateralized. This implies that borrowers are requested to deposit a higher amount than the USDX value the protocol minted. The debt-to-collateral ratio is then applied to determine the liquidation value.<\/p>\n
For instance, a 200% collateralization ratio means that the user will be liquidated if the locked crypto value is below 2times that of the borrowed USDX. The collateral stored in the smart contracts will be liquidated automatically and burned If the \u2018debt-to-collateral\u2019 ratio falls below a given threshold.<\/p>\n
The KAVA Token<\/strong><\/span><\/h2>\n
KAVA is the utility and native token of the Kava.io blockchain. It is used for governance and staking or validation.<\/p>\n
For governance, KAVA works almost like the MKR token in Maker Dao Ecosystem. Users holding KAVA can vote on major parameters like network upgrades. The token empowers users to vote on proposals and other items of the CDP (collateralized debt position) system. These items or parameters include collateral-to-debt ratios, accepted collateral type and the total amount of USDX, etc.<\/p>\n
In addition to governance, the KAVA token serves the following purposes:<\/p>\n
Security<\/span><\/h3>\n
The KAVA token helps to maintain security in the platform. The network users stake the coin to achieve this purpose. It is only the highest 100 nodes in the platform that validates blocks in Kava.io. The protocol algorithm determines these top nodes by the weight of their bonded stake tokens. They are later given some cryptocurrencies as a block reward.<\/p>\n
Staking Asset<\/span><\/h3>\n
Stakers in the Kava.io platform, aside from securing the network, can also stake their tokens using curves of network validators. Malicious users may lose their tokens as KAVA has zero tolerance for such users. Action like signing a transaction twice and failure to keep to high uptime lead to the removal of a participant.<\/p>\n
Last Resort Lender<\/span><\/h3>\n
The KAVA token is also the network’s reserve currency. The Kava.io protocol mints new tokens for the purchase of more USDX\u00a0 when it is over collateralized. The network uses this mechanism to retain the value of its stable coins.<\/p>\n
However, KAVA holders receive the equivalent of their staking amount as staking returns. If the amount staked is low, the APR for validating the token rises to the highest point of 20%. But if many users are staking, the rewards will then decrease to a minimum of 3%. There may be an additional charge from those running the validator.<\/p>\n
The staking pool developed by Binance Exchange is the best-recommended validator.\u00a0 This pool is currently giving about 14-16 percent yearly yield to members staking on it. It is also more secure than others as they use Binance storage.<\/p>\n
USDX-Kava.io<\/span><\/h3>\n
Kava.io network has a stable coin known as the USDX. \u00a0It is the coin users receive and also pay back loans with. USDX features make the transaction process faster. This makes it ideal for payment purposes and other related corporate payment processes. It also serves as the general payment system.<\/p>\n
Margin Trading\/ Leverage<\/span><\/h3>\n
Kava network users also make use of USDX KAVA in buying additional cryptocurrency assets. This allows experienced investors to adequately leverage their exposures in new and better ways.<\/p>\n
Hedging with Interest<\/span><\/h3>\n
Users can hold USDX as a digital asset. USDX, in this regard, serves as a ‘haven’ during the period of market volatility. Holders receive the accumulated interest that equals the recent saving rate of USDX when they bond their coins.<\/p>\n
Team Behind Kava.io<\/span><\/h2>\n
Ruaridh O\u2019 Donnel, Brian Kerr, and Scott Stuart co-founded Kava.io in 2018. They first founded Kava.io Labs Inc, the parent company of the protocol. Kava.io labs is a profitable company aimed at developing and driving the establishment of the Kava.io.<\/p>\n
Brian Kerr is presently the CEO of the platform. He has a lot of experience in the crypto market as a blockchain advisor. Brian has also worked as an advisor for other cryptos, including DMarket and Snowball. He studied business administration and has a successful carrier.<\/p>\n
Ruaridh O\u2019Donnell is a Master’s degree holder in Physics. He is formally a data analyst and an Engineer at Level works. The third Co-founder of Kava.io is Scott Stuart, formerly a professional player in poker. He is currently working with Kava Labs as the product manager.<\/p>\n
Kava.io Labs has a dozen of other employees the made up the team, including the contractors. The most popular is Denali Marsh. Denali Marsh is a ‘smart contract’ developer currently occupying the position of KAVA’s blockchain engineer.<\/p>\n
The Kava.io team officially launched its decentralized lending protocol in June 2020. At the time, the Binance coin (BNB) serves as collateral for borrowing USDX. The team launched a coin sale on the Binance exchange in 2019. They were able to raise $3 million from selling 6.5% of KAVA’s total supply.<\/p>\n
Why Does Kava.io Have Value?<\/span><\/h2>\n
The volume of KAVA supplied to the crypto market is limited like all other tokens. This implies only 100 million KAVA \u00a0will ever be supplied in line with the rules of the software.<\/p>\n
The KAVA token helps in governing the network. It also serves as a reward for USDX minting.<\/p>\n
The users of the token can hand over their assets to validators managing the network. This enables them to compete for the KAVA that is newly minted.\u00a0 It allocates votes to them to gain a portion from the \u2018stability fees\u2019 users paid for closing their collateralized debt position (CDPs).<\/p>\n
Moreso, KAVA allows users to participate in managing operations in the system. It enables holders and stakers of the crypto to vote on both its software rules and policies. This implies that by holding and staking KAVA, members can propose to change certain software parameters by voting. These parameters include borrower’s fees, required collateralization ratio, and the assets the protocol accepts as collateral.<\/p>\n
What Makes Kava.io Unique?<\/span><\/h2>\n
Kava.io supports \u2018cross-chain assets, unlike other ‘decentralized lending\u2019 platforms of like manner.<\/p>\n
It adopts a\u00a0 technology known as the ‘Cosmos zones’, enabling users to deposit a wide range of assets like\u00a0 Binance Coin (BNB), Bitcoin (BTC), Binance USD (BUSD), and XRP. Cross-chain assets are compulsorily wrapped as BEP2 (Binance Chain) assets.<\/p>\n
Kava.io allows users to operate their staking node to make a direct profit from the platform. Users can also earn normal token rewards via minting USDX on the network. The protocol also uses various mechanisms to reduce token circulation supply by burning them.<\/p>\n
The Kava.io system also gives users the opportunity of earning a yield via USDX stable coin minting. These coins can be paid to the protocol\u2019s money market once they are minted. The process is called HARD Protocol. It earns members variable APYs while Kava.io secures their collateral.<\/p>\n
However, only the validators (top 100 nodes) are qualified to earn these rewards. In addition, users holding KAVA can stake them on different exchanges that are compatible with the platform, like Huobi Poo and Binance.<\/p>\n
- 9.2<\/span> Auction Module<\/a><\/li>
- 4.2<\/span> Staking Asset<\/a><\/li>
- 4<\/span> The KAVA Token<\/a>
- 2<\/span> Kava.io in a Nutshell<\/a><\/li>
![\"Kava.io](\"https:\/\/deficoins.io\/wp-content\/uploads\/2021\/06\/uMDvCQHv-1024x780.png)