Kava is a decentralized lending protocol that uses cryptocurrency as collateral. This platform facilitates cross-chain swaps and offers attractive staking rewards. Furthermore, users are able to loan against various assets.
Ruaridh O’Donnell, MSc Physics is one of the founding members and leads blockchain development at Kava Labs. Prior to Kava, he worked at Levelworks as an engineer and data analyst.
Wallet
Kava is a decentralized lending and borrowing platform powered by Tendermint as its consensus mechanism, offering secure yet scalable governance for users with interoperability and efficiency in mind. Kava utilizes stablecoin backed by crypto asset collateral as collateral while using its staking token for governance purposes.
To use the Kava protocol, users first deposit their desired collateral into a smart contract and lock it. Kava then issues an interest-bearing USDX loan based on its value – known as a collateralized debt position or CDP loan.
Users can securely deposit and withdraw their assets using either a mobile wallet or web wallet, both free to use. These wallets offer various features such as multi-currency support. Furthermore, enterprise-grade security is implemented and user-friendliness is ensured. Hardware wallets offer more advanced functionality but require technical expertise for installation and management – Kava supports various wallet providers, as well as supporting some third-party solutions directly.
Swap
Kava platform gives its users access to loans and stablecoins while enabling minting, swapping and earning. It utilizes its unique co-chain architecture which provides interoperability and scalability.
The platform utilizes its own stablecoin called USDX, which is pegged loosely to the dollar. USDX is created when users create Collateralized Debt Positions by providing collateral; at closing time both collateral and USDX will be returned back to them.
The Kava Swap Protocol is a market making layer on the Kava platform that enables users to trade assets between blockchains. Liquidity providers can deposit their assets into pooled liquidity pools and will be rewarded with Kava Swap Tokens (SWP), with rewards calculated based on transactions completed and adjusted according to governance proposals. SWP token is considered the governance token for the entire Kava ecosystem which includes Mint Protocol, Lend Protocol and Swap Protocol.
Lending
Loaning money from financial institutions can be a tedious and time-consuming process that often includes paperwork and credit checks. To alleviate these tasks, Kava has developed a lending and borrowing system which enables users to borrow against major crypto assets using smart contracts – accessible to anyone with an active cryptocurrency wallet.
The USDX collateralization protocol enables users to secure their crypto holdings using USDX as collateral, the stablecoin that powers its network. They then secure collateral coins into smart contracts in order to receive loans in USD. When collateral values drop below the loan amount in USDX terms, debt liquidation occurs immediately to protect ecosystem from defaults.
Tendermint blockchain ensures finality for transactions, while its scalability is impressive. Furthermore, this network offers various community-built applications and interoperability with Ethereum’s EVM; making this one of the main draws compared to other DeFi projects.
