Kava Network (KAVA): Cosmos' Speed Meets Ethe​​reum's Power

Traditional banks are not necessarily the most favorable to individuals. The low-interest rates compounded by inflation devalue the money you save in them. And getting a loan is a cumbersome process that can end in failure. Decentralized finance (DeFi) seeks to upend traditional finance by changing the game's rules. One of the DeFi platforms that have come to do that is Kava Network.

Developed to allow users to lend and borrow multiple cryptocurrencies within its network, Kava not only seeks to revolutionize the traditional finance industry, but also to improve the services of the current DeFi world.

Key Takeaways:

• Kava Network is a secure Cosmos SDK blockchain that offers users lightning-fast permissionless borrowing with seamless interoperability.
• Popular protocols on Kava Network include Kava Mint, Kava Lend, Kava Swap, Kava Earn, Kava Staking and Kava Liquid Staking.
• Looking to trade KAVA tokens? Bybit now offers the KAVA/USDT Spot trading pair and KAVAUSDT Perpetual Contracts for trading. 
• Bybit is celebrating the new listing of the KAVA/USDT Spot trading pair by holding two exclusive events for users to share a 150,000 KAVA prize pool.

What Is Kava Network?

Kava Labs developed Kava Network as an open bank that allows users to earn more with their crypto assets holdings while providing capital to those who need it. Users are offered new ways of making a profit by receiving rewards when they move their assets to the platform.

Unlike Layer 2 protocols that are built on existing blockchains, Layer 1 is the core platform of the blockchain. Layer 1 blockchains typically face the problem of limited scalability. Kava Labs seeks to resolve this issue with its unique Co-Chain architecture.

The Kava ecosystem is the first DeFi platform built on Cosmos SDK that functions as an open-source, decentralized network. The Kava platform uniquely combines the strengths of two Co-Chain protocols: The power of the Ethereum Co-Chain and the seamless interoperability, speed, and low transaction fees of the Cosmos Co-Chain. This ensures that any decentralized finance application can integrate the Kava Network into its system to allow its users access to the platform's services.

Kava Network: How It Works

As a decentralized financial service hub, Kava aims to help users maximize profit on their crypto assets by providing multiple services offering profit opportunities.

Kava Network has various protocols that offer different permissionless services to achieve its aim.

Kava Mint

The first is Kava Mint (formerly Kava CDP). The platform mints a stablecoin for users who want to borrow. With Kava Mint, you can deposit your major crypto assets as collateral to borrow USDX, the stablecoin minted by the platform, for little to no interest.

This is ideal for coins that you wish to HODL. When you take out USDX loans, you can hold on to your long-term crypto investments and profit without trading your assets. 

Kava Lend

The next service is Kava Lend (previously HARD Protocol). This yield farming service allows users and investors to supply funds to Kava’s liquidity pools and receive a yield on their investments. 

General market conditions determine current yield rates. For example, if there’s a low supply of Ethereum, the rate of yield of that investment on Kava Lend will be high, and vice versa.

When you supply your crypto to Kava’s borrowing pools, you can earn more APY while simultaneously collecting more rewards. Thereafter, you can borrow any coin against your collateral and re-supply, thus increasing your rewards.

Kava Swap

The third service that the platform offers is Kava Swap. It allows Kava users to swap USDX tokens at fees lower than those of centralized crypto exchanges. Before swapping, you can scout for profit chances when the individual pool rates fall beneath the market standard. 

Kava Swap uses an automated market maker (AMM) to facilitate trades. Unlike an order book, which requires a seller for a trade before a person can purchase a cryptocurrency, the AMM allows a trade to be carried out as the trade occurs between a smart contract — which has a stable supply of cryptocurrencies — and a buyer. This is made possible because the Kava Swap connects liquidity from other blockchains.

Kava Earn

With Kava Earn, users can supply their assets and earn rewards, and maximize their returns by participating in liquidity pools and other financial activities on the platform.

Kava Staking

Kava Staking lets you lock up your KAVA tokens in the network to support its security and operations. In return for staking KAVA tokens, users earn rewards in the form of additional KAVA tokens. Staking helps maintain the network's integrity and functionality, while the rewards serve as an incentive to participate in this process.

Kava Liquid Staking

Kava Liquid offers a streamlined liquid staking mechanism for staking KAVA tokens and receiving bKAVA in return. By supplying or staking your KAVA, you can easily convert it into its liquid form, bKAVA, which can then be channeled into KAVA Earn, a yield optimizer that subsequently directs it to Kava Boost. Essentially, Kava Liquid Staking enhances your KAVA staking experience by integrating it with the KAVA Earn feature.

Key Features of Kava Network

Ethereum Co-Chain

The Ethereum Co-Chain enables the Ethereum ecosystem to effectively merge with the Kava Network. This protocol provides an Ethereum virtual machine (EVM)–compatible program execution environment on the Kava Network. The setup allows developers skilled in Solidity to craft DApps that not only operate within the Ethereum framework, but also harness the enhanced scalability and security features of the Kava Network.

Cosmos Co-Chain

Built on the Cosmos SDK, Kava offers a robust blockchain framework known for its scalability. The Cosmos Co-Chain serves as a bridge linking Kava to Cosmos, whose vast ecosystem comprises over 35 different blockchains developed using the Cosmos SDK that collectively represent assets worth over $60 billion. 

Kava DAO

Kava DAO is the decentralized management team that governs the Kava Network's robust Co-Chain architecture. It’s a fully decentralized autonomous organization (DAO) which is responsible for the smooth operation of the network.

Kava DAO consists of those who stake the KAVA token and the network's validators.

As a truly decentralized organization, it makes various decisions on the network — including the distribution of on-chain incentives updates, etc. — without the arbitrary control of a single entity.

What Are KAVA Crypto Coins?

As mentioned above, Kava features a crypto-backed stablecoin called USDX. Besides its stablecoin, it has three native tokens — KAVA, HARD and SWP.

The KAVA token is the governance token of the Kava network. Holders use it to secure the platform, vet governmental decisions and represent a share of the network. The KAVA token also governs the Kava Mint protocol. This means that KAVA token holders can vote for all developments on Kava Mint.

Meanwhile, the Kava Lend protocol is governed by the HARD token, while SWP is Kava Swap’s governance token. The Kava Lend protocol rewards both lenders and borrowers with HARD tokens. Liquidity providers can earn SWP tokens in Kava Swap.

KAVA Tokenomics

There is a total supply of 711 million KAVA tokens, with a circulating supply of 711 million and a market cap of $495.7 million. Its current market cap is close to $495.7 million. 

Pros of the Kava Ecosystem

Seamless Scalability

The Tendermint Core consensus engine of the Cosmos network was developed to support proof-of-stake systems like Kava so that it can provide seamless scalability.

The engine's impressive speed means it can process an unrivaled amount of transactions in minutes. Moreover, the lightning-fast speed doesn’t weaken its decentralized feature or the security of the network, offering a viable solution to the blockchain trilemma. This gives Kava an edge over DeFi competitors like MakerDAO, which are built primarily on the Ethereum network.

Cross-chain Interoperability

Kava's incorporation of the two Co-Chains enables developers to seamlessly connect their projects with a wide variety of assets, and millions of users within a single network.

Fast Ecosystem Growth Rate

On-chain incentives for developers will attract the best hands in the Ethereum and Cosmos ecosystems to build projects and DApps on the existing Kava blockchain.

Inter-Blockchain Communication (IBC)

The Inter-Blockchain Communication feature of the Cosmos ecosystem enables blockchains built on the same network to communicate. The Cosmos SDK has been used to develop over 30 blockchains specialized for various purposes.

This means Kava can implement favorable features from other open-source networks, thus increasing its growth.

Cons of the Kava Ecosystem

USDX Stability

Though termed a stablecoin, USDX may not be as stable as this category implies. It de-pegged in early May 2022, sinking as low as $0.55. While not an algorithmic stablecoin like TerraUSD (UST), USDX is a stablecoin backed by a variety of crypto assets as collateral reserves, so the collapse of a single crypto asset could greatly affect the stability of the coin. Before the collapse of UST, USDX had included UST in its collateral loan; hence, when UST lost its value, USDX was implicated. 

Time

Kava is a relative newcomer to the major Layer 1 networks that lead the crypto market today, so it has to compete for relevance with the older networks. For example, Bitcoin is about ten years older than Kava, and the major smart contract network, Ethereum, is also much older. Since they came on the scene first, they’ve attracted larger market shares. Therefore, Kava will have to do more to gain prominence.

KAVA Price Prediction

The current price of KAVA is $0.684488 (as of Aug 25, 2023). It reached an all-time high (ATH) of $9.12 on Aug 30, 2021 and an all-time low of $0.287137 on Mar 13, 2020. Although its current price is 92.49% below its ATH, experts are positive that the KAVA token’s price will rise in the next few years.

Analysts from PricePrediction forecast that the KAVA’s price will rise to $1.07 by the end of 2023, $2.36 in 2025 and $4.70 in 2027. KAVA is then expected to break its ATH and increase to $14.91 in 2030. 

This positive growth outlook is supported by DigitalCoinPrice, whose experts believe KAVA will increase to $1.51 by 2023, $2.48 in 2025, $3.12 in 2027 and $7.10 in 2030.

Is Kava Network (KAVA) a Good Investment?

Kava Network has broken the deadlock by virtue of its cross-chain functionality within a single network. Although it wasn't the first blockchain to achieve this, combined with its other features it’s undoubtedly a major addition to DeFi.

With its scalability ensured by the Tendermint Core consensus engine, DeFi is now sure to be able to serve very large and complicated economies, which are accompanied by millions of transactions.

Kava’s service spectrum is impressively broad. Notably, Kava Labs ventured into the GameFi and NFT realms in May 2022, indicating its adaptability to emerging trends. The inauguration of the Kava Network mainnet has further solidified Kava’s commitment to seamless cross-chain services. 

While the crypto domain faced a bearish trend in the early months of 2022, the market’s potential rebound could see a surge in bullish sentiments toward investments like Kava that showcase promising growth trajectories.

Furthermore, Kava’s recent articles highlight significant developments, suggesting that Kava is continuously innovating and expanding its offerings. This makes it a potential investment to watch in the crypto space. 

While all investments come with inherent risks, Kava’s consistent advancements and adaptability to the evolving DeFi landscape make it a compelling consideration for investors. Always conduct thorough research and consult with financial experts before making any investment decisions.

Who Is Kava Network (KAVA) For?

The three types of individuals who will find Kava an attractive investment include:

• Traders who want to make their yield-farming activities more profitable
• Investors who want to use various cryptocurrencies for different purposes without reducing their crypto holdings
• Everyday users who want to minimize the fees paid to exchanges

Where to Buy KAVA

If you’re interested in trading KAVA tokens, you’ll be glad to know that Bybit offers both the KAVA/USDT Spot trading pair and KAVAUSDT Perpetual Contracts. To get started, you’ll need to first establish a Bybit account and fund it with cryptocurrency. Then, you can navigate to the KAVA/USDT Spot trading page or KAVAUSDT Perpetual Contracts trading page to start trading.

While Bybit has offered KAVAUSDT Perpetual Contracts all along, the KAVA/USDT Spot trading pair is a new addition to the Bybit trading platform. In celebration of this listing, Bybit is holding two exclusive events for users to share from a total prize pool of 150,000 KAVA tokens.

For the first event, simply be among the first 2,000 new users to complete the following two steps from Aug 22, 2023, 10AM UTC through Sep 5, 2023, 10AM UTC to receive 50 KAVA:

1. Register with Bybit and complete Identity Verification.
2. Accumulate a deposit volume of at least 100 USDT worth of KAVA, or deposit 100 USDT and buy any amount of KAVA via your first Bybit account trade.

The second event is exclusively for existing users who already have an account with Bybit prior to Aug 22, 2023, 10AM UTC. You can earn 10 KAVA by accumulating a deposit volume of at least 100 USDT worth of KAVA from now through Sep 5, 2023, 10AM UTC, or depositing 100 USDT and buying at least 100 USDT worth of KAVA using your Bybit account. Please note that the rewards will be distributed on a first come, first served basis to the first 5,000 existing users.

Closing Thoughts On Kava

The Kava platform has bright prospects of changing the lending and borrowing niche in the DeFi ecosystem. With not just one but six protocols, Kava diversifies its financial services, allowing people to not just lend and borrow, but to mint, swap and earn tokens as well.

In addition, the unique Co-Chain architecture of the network allows major blockchains to participate and encourages scalability. This sets the stage for DeFi to be more widely adopted in the world economy.

The cross-chain framework is still in its early stages of development, so we can expect even more exciting updates that will take Kava to the next level.

#Bybit #TheCryptoArk