In the ever-changing cryptocurrency field, Kava is emerging vigorously, becoming the focus of many investors and ranking high on the potential list in the crypto community.
Since its establishment in 2017, Kava has forged ahead and continuously innovated. Initially launched with the vision of cross-chain payments, it quickly transformed upon sensing the booming development of the DeFi track, becoming a leader in the Cosmos ecosystem with extraordinary agility and foresight, supported by Ripple. In 2022, Kava completed a significant strategic transformation, successfully transitioning to an EVM-based Cosmos-Ethereum interoperable Layer 1 blockchain, redefining its development strategy and standing out in the fiercely competitive Layer 1 blockchain ecosystem.
Next, let’s explore the story behind Kava:
What is Kava?
Kava was originally an automated collateralized lending platform similar to Maker DAO, where users could deposit diverse cross-chain assets like BNB, BTC, XRP, BUSD, etc., to borrow collateralized stablecoin USDX. It also launched the Harvest.io lending protocol (later renamed Hard Protocol, then Kava Lend), both of which together built Kava’s Defi services.
Kava is built on Cosmos and can function as a standalone chain, thus it can also be understood as aiming to become the first Defi Hub chain on Cosmos.
However, with the development of DeFi interoperability, Kava version 10 was launched in 2022, officially transitioning to a Layer 1 that is developed with Cosmos SDK, using a POS mechanism and EVM compatibility, dedicated to cross-chain interoperability and asset circulation connecting Cosmos and EVM ecosystems.
Kava ranking situation:
Divided by features, for example, Ethereum and EVM-compatible ones are one category, while non-EVM compatible ones focus on being their own chains like Cosmos, Polkadot, etc. Kava can be segmented within Cosmos, focusing on connecting the Cosmos and EVM ecosystems, currently ranking second in the Cosmos ecosystem.
Kava team members:
Currently, there are 45 employees, with an average tenure of 2.2 years; core board members like Brian Kerr and Scott Stuart have remained stable with a tenure of 7 years.
Brian Kerr: Co-founder and board member of Kava Labs, previously the founder and CEO of Fnatic Gear.
Scott Stuart: Co-founder and CEO of Kava
Kevin Davis: Chief Engineer
Aaron Choi: Vice President
Ruaridh O'Donnell: Chief Developer and Co-founder
Jack Zampolin: Investment Advisor
Kava financing situation:
Basic information about Kava tokens:
1. Dual token economic model: governance token $Kava and stablecoin $USDX.
$KAVA: As a POS staking token, taking the form of inflation rewards, transaction fees, voting and governance, etc.
$bKAVA: A liquid staking derivative token that allows staked $Kava to retain liquidity.
$wKAVA: A wrapped token of $KAVA with ERC20 properties.
$USDX: The system's native stablecoin, obtained by staking tokens to gain USDX for higher liquidity, similar to DAI in MakerDAO.
2. Main uses of $KAVA: Transaction fees, staking rewards, validator commissions, community governance.
3. $KAVA distribution: 100 million tokens at the genesis, with no upper limit on issuance.
Its development plan for EVM asset compatibility has clear expectations regarding the types of assets, access to asset cross-chain bridges, and subsequent asset circulation with other application chains in Cosmos.
At this point, many may wonder, what is USDX?
USDX is a CDP collateralized stablecoin, soft-pegged to the US dollar at a 1:1 ratio, which adjusts supply through an elastic supply mechanism according to algorithms to maintain price stability.
Uses of $Kava:
Transaction fees: Ecosystem fees need to be paid using $Kava tokens, including asset transfers, opening/closing CDPs, transfer transactions, etc. All require $KAVA. Among them, the transaction fees for CDPs will be distributed to validators and delegators in a certain proportion.
Staking rewards: Stake $KAVA tokens to earn an APR of 3%-20% based on the total network staking rate.
Validator commission: Node validators can earn a certain percentage of commission from the profits generated by their delegators.
Community governance: Authorized to initiate proposals and vote to modify platform rules.
Deflationary mechanism:
Every time a new block is produced in the network, new Kava is minted as rewards for node validators, with an expected annual inflation rate of 7%. However, each CDP will have a corresponding stable fee rate, and when $KAVA is used as the payment for the stable fee of the CDP collateral debt position, it will be burned to maintain the balance of the token supply.
What is Kava doing?
Summary: An L1 public chain that combines the speed and interoperability of Cosmos with the developer power of Ethereum.
Kava technical architecture:
The most important feature of the Kava network is the co-chain architecture, which allows developers to build and deploy their projects using either the EVM or Cosmos SDK execution environments, achieving seamless interoperability between the two.
The co-chain of the Kava network operates like the two hemispheres of a brain. The Cosmos public chain is optimized for developers in the Cosmos ecosystem. The Ethereum Co-Chain is optimized for developers in the Ethereum ecosystem. The translator module connects the two different execution environments of Co-Chains, enabling them to collaborate seamlessly on a large scale.
Looking to the future, leading the new journey of blockchain technology:
Standing at present and looking to the future, Kava's development prospects are promising. With innovative technical architecture, a thriving ecosystem, strong market partnerships, and continuous innovation exploration, Kava is expected to lead the charge in the wave of blockchain technology development, bringing surprises and possibilities to global users and developers, writing a new chapter in the development of blockchain technology.
